ARCTURUS.
74,3
market value caused by it. When this is ascertained a balance. will be struck in favor of one side or the other, ItS may appear, after charging the importers with the amount of freight unpaid·. The question of costs is reserved. The order of referenoe to be settled on two days' notice.
THE
AROTURUS.
(District Court, N. D. Ohio, E. D. October Term, 1881q 1. COMMUlsIOJ:l'ER'S REpORT-ExcEPTIONS SUSTAINED.
Exceptions to a commissioner's report awarding to the (lrlglnallibeJants the proceeds from the sale of a vessel, and excluding other creditors whose claims were of later origin, though of equal rank, sustained. MARITIME LmNS-DEF'INED.
2.
A maritime lien is aju8 in re/ it accompanies the property into the hands of a bonafide purchaser, and can be enforced or divested only by a proceeding in rem. PAID.
All claims against a vessel s1)ould be paid in the inverse order of their origin ; follOWing the decision of this court in the case of The Selkirk. 4. SAME-How PAID. All,claims of equal rank against, a vessel should be paid ratably in proportion to the amount of each claim, and unaffected by any priority of date in the commencemen t of legal proceedin.ti;s; following Vandt:waler v. Mills, 19 How. 82.
8.
SAME-IN WHAT ORDER
In Admiralty. H: D. Goulder, for libelants. Mix, Noble et White, for respondents Dunford and Alverson. WELKER, J. In this case an important question is for the first time presented to this court in a form requiring its careful consideration and detel'rnination. For several years past it has been the practice to award to the party first procuring the seizure of a vessel by virtue of proceedings in admiralty, a precedence over the holders of other claims of the same (or lower) rank in the distribution of the proceeds of sale of the property seized, where the fund in the registry proved insufficient for the satisfaction of all; the commissioner to whom references have been made for the purposes of distribution having.so reported on the authority of Ben. Adm. 332, and such others as have been in accord with Judge BENEDICT'S views on this question. To these reports, so in harmony with the opinions of this able jurist, no formal exception has heretofore been taKen, and until now the judicial determination of the question by this court has not been invoked. The language of Judge BENEDICT on this subject is as follows: "The order of distribution or marshaling of the proceeds (of the sale of a vessel) is settled by the court according to the legal priority. * * * In claims of the same rank the one first commencing his proceedings is preferred
144
FEDERAL REPORTER.
in the (listribution. The party first seizing holds the property against all other claims of no higher character."
In support of the text so quoted, reference is made to the follow· ing authorities: Blaine v. The Carter, 4 Cranch, 328; The Paragon, 1 Ware, 322; The Phebe, ld. 359; The Globe, 1 (should be 2) Blatchf. C. C. 427; The Adele, 1 Ben. 309; Boyd, Proc. 45. From an examination of all the above, excepting the last named, which is not at hand, it appears that the case of 7'he Globe was decided by Justice NELSON, of the supreme court, holding the circuit court in 1852. The language used by the learned judge in terms would fully support Judge BENEDICT'S dictum, viz.: "It has been argued that this maritime lien against a vessel for supplies and materials furnished to her master at a foreign port, is an abiding lien, and adheres to thll vessel, and may be enforced over all claims of a like nature subsequently accruing in the course of her employment. I cannot assent to this position, On the contrary, I am satisfied that the true rule upon the subject is that, in respect to maritime liens of this deRcription, the party first instituting legal proceedings for the purpose of enforcing his claim against the vessel is entitled to satisfaction out of the proceeds of her sale."
The question to which this language was applied was whether, as ag'ainst a purchaser of a vessel at judicial sale, in virtue of proceed. ings in rem under the water-craft law of Ohio, one who had previously f1)rnished supplies to the vessel in a foreign port could enforce a lien upon her; and was not a question as to who had a prior right to the satisfaction of his claim out of a fund in the registry of the court produced by her judicial sale. And the learned judge held that the sale, having been in a proceeding in 1'81n, "must be held conclusive upon the transfer and disposition of the vessel in question, in whatever place she may be found, and upon the title to her, by whomsoever it may be questioned, and whether involved directly or collaterally." In other words, there had been a judicial sale in a proceeding in rem, which was notice to the world, and the purchaser took the vessel divested of all liens not presented in that suit for adjudication. Perhaps, if the fund prDduced by the sale of the Globe had been in the registry of Judge NELSON'S court, and if the controversy had been in regard to priority of right to share in the fund, the language of the court would have been somewhat modified. The case of Blaine v. The Carter, 4 Oranch, 328, seems even more unsatisfactory as an authority in support of Judge BENEDIOT'S dictwn, and the case of The Adele, 1 Ben, 309, maintains the theory that all claims upon the fund in the registry which are of equal rank should be satisfied in the order in which the several libels are filed. The reference to the cases of The Paragon and The Phebe, in Ware, 322, 359, seems still more .unfortunate as authority for the doctrine they are supposed to sllstam, as will be seen from the following quotation from the opinion of the court in the case of the The Paragon, viz,: "When all the debts [,old the same rank of privilege, if the property is not sufficient to
THE ARCTURUS.
745
fully pay all, the rule is that the creditors shall be paid concurrently, each in proportion to the amount of his demand." The same language is adopted in the subsequent case of The Phebe. Thus it appears that the theory of Judge WARE was diametricaHyopposed to the doctrine in support of which it seems to have been quoted. I apprehend that the opinion of Judge BENEDICT, and those who hold with him on the question at issue, rests upon the theory that the maritime lien is simply a right to proceed by suit against a vessel or other thing which i& the subject of a claim, by name; in other words, by an action in rem, instead of proceeding by suit aga,inst own,er of the thing, in personam. And this being so, the one who first asserts that right is ent.itledto complete satisfaction of his claim as against others' of equal rank. And this Seems to have been the view taken by Mr. Justice NELSON in the case of The Globe. . "The question has been the subject of examination by the learned district jUdge for the southern district of New York. III a case which came before him in 1841, rThe Triumph,lhe held that the true meaning of a maritime lien was, that it rendered the property liable to the claim without a preVious judgment or decree of the court, sequestering or condem ning it, or establishing the demand as at comlllon law, and that the action in 1'em caried it into effect; that the appropriation of the property to that end became absolute and exclusive on suit brought, unless superseded by some pledge or lien of paramount order; that it resulted from the nature of the right and the proceedings to enforce it, that the first action by which the property was seized was entitled to hold it as against all othe! claims of no higher character; that the, lien, so termed, was, in 1'eality, only a p1'ivilege to arrest the vessel for th6 demand, which of itself constituted no incumoranae on the vessel, and became such only by Vi,·tU8 Of an actual attachment for tke same. I concur fully in this view."
Fl'om this theory of the maritime lien the doctrine of "first come, first served," would seem naturally to flow. But witholltundertaking to criticise its sonndness from a philosophical point of view,.or allude to the consequences involved in it, it may be sufficient to draw attention to the fact that, at a later period, the supreme court of the United States, in the case of Vandewater v. Mills, 19 How. 82, has ,quite dif· ferently defined the maritime lien. In that case Mr. Justice GRIER, delivering tlie opinion of the court, says: "The maritime ·privilege' or lien is adopted from the civil law, and imports a tacit hypothecation of the subject of it. It is a.ius in re, without actual possession, or any right of posseRsion. It accompanies the property into the hands of a bonafide purchaser. It can' be executed and divested only by a proceeding in 1'em. This sort of proceeding personal property is unknown to the common law, and is peculiar to the process of courts of admiralty."
This language seems well calculated to convey the idea that the maritime lien is something more than a mere right to 8ue the thing which is the Bubject of it; that it imports a right in the thing; or, in the language of the learned justice, aju8 in re, enforceable and made effectual by a proceeding in rem, and only divested by the paYDlent of
746
the claim it is intended to secure, or by a judicial sale of the property in a proceeding in rem. In the caf,le at bar the fund to be distributed (and remaining in the registry, aftel; sundry payments of preferred claims, pursuant to previous orders of tpe court) amounted to the sum of $1,388.19; from which the commissioner, in his report, proposes to deduct the unpaid costs, $215.5'5, and the sums decreed in favor of sundry intervening creditors, all amounting to $972.66. Said creditors are five in number, and are all paid in full except one, viz., J. P. Donaldson, whose claim accrued partly in the season of 1881, and partly in that of 1882; while those of the other four creditors accrued wholly in the season of 1882; for this reason being preferred over the older claims, pursuant to a former ruling of this court in the case of The Selkirk: "All claims ought to be paid in the inyerse order of their origin, dividing by, seasona, rl;l.ther than by voyages, as upon the ocean." The commissionerproooeds to award tne residue of said fund, $199.98, to Wolf & Davidson, on their decree for $2,265.40, by rea· son of being.the original or first libelants, on whose process the fund was brought into the registry, to the exclusion of the claim of Dunford and Alverson, amounting to ,$3,831.19, and of the balance of .Donaldson's claim. To this report of'the commissioner Wolf & Davidson, by their counsel, except. whose complaint is that the report does not award the whole fund, less costs, to them, instead of paying the five creditors whose claims were of later origin. To sustain this exception would amount to a repudiation6fthe doctrine of TheSelkirk and quoted by the commissionei'. No sufficient has beElll assig'1ed in the argument for doing this, nor nas any authority been quoted which would justify the court in making the change demanded by the exception, and thus unsettling the wEill-established practice; it is therefore overruled. Exception to said, report has also been filed by Dunford and Alverson, the grounds of which are 'therein stated a,s follows: (1) In that he (the comrnissioner) has disallowed their claim; (2) in that he has allowed anypbrtion of the claim of libelants, (Wolf & Davidson;) (3) in that he has failed to apportion the sum of $199.98 (the balance after paying certain other claimants) ratably libelants and them.. '. In the argument of counsel no stress is laid upon the first or second of the above grounds; but the question involved. in the third has heen discussed with much ability and evidence of research. If it cannot be said that the authorities preponderate in fiivor of the exceptor's views, it certainty appears true that the conflict among them is so evenly waged" that the court is left 'at liberty to adopt t):lat theory whic,h seems, in its judgment, mQati,In a,ccordance with the legal.principle promulgated by the supreme of the-lJnited States, and in accordance with its own views of justice and propriety., H the maritime lien impollts aj113 in re, or proprietary right, in the ship, it is not
ARCTURUS,
747
rem,"
easy to understand why the mere act of instituting suit in rem for the enforcement of a lien should operate to divest or supersede the lien of another party whose claim is· of equal rank and merit, who, in obedience to the proclamation, comes into the proceeding for the assertion of his claim before the final decree disposing of the fund produced by the sale of the vessel. The mere accident (it may be) by which one of several libels happened to be first brought to the clerk's office and filed, seems quite insufficient as an authority for the original libelants to sweep the fund to the exclusion of all others having co-ordinate claims. If this may rightfully be done, why not exclude the claims of higher rank as well? Their holders are guilty of the same laches as those of equal rank. It may be said that the one who first causes the arrest of a ship assumes the responsibility of the costs and expenses of the proceeding, and is primarily liable for damages for a false arrest. The answer is that the conrt invariably makes the just costs and expenses a first charge upon the fund in the registry, so that no essential risk to the honest libelant is involved; and if one causes the arrest of a ship on a claim found to be dishonest and fictitious, he well deserves to be mulct in damages. It is conceded that a party holding a claim against the ship arrested in the admiralty, who neglects to obey the injunction of the court requiring "all persons claiming the same · · .. to appear before the court, .. '" · then and there to interpose a claim for the same and to make their allegations in that behalf," until the property is sold and the proceeds distributed by order of the court, is effectually cut off from all remedy against the ship and its proceeds. His lien is lost by his neglect, the proceeding in rem being notice to all the world. It is divested by a judicial act; by the Bolemnjudgment of a court of competent jurisdiction., is in accordance with the opinion of the supreme court ·in the case of Vandewater v. Mills. "It can be executed and divested only by a proceeding in
Dunford and Alverson's libel was not only filed before any "final decree" in this case, but nearly two months prior to the interlocutory decree or order by which the court found and decreed the sum due Wolf & Davidson as damages. The date of filing was also prior to tlie sale of the schooner, which was made under an interlocutory order for that purpose. The claims of Wolf & Da-vidson, and Dunford and Alverson, and tire unpaid remainder of the Claim of Donaldson, are of equal rank, and shOUld share in the residue of the fund produced by sale of the Arcturus, viz., $199.98, ratably in proportion to the amounts of each claim unaffected by any priority of date of the commencement of proceedings in this case. The last exception 'of Dunford and Alverson is sustained, and the ease is again referred to the same commissioner with,mstructi<ms to " report anew in accordance with the fO'regoing: The following authorities, among others, have been considered,and
748
are citec1 in support of the concJusions of the court, viz.: The Para.. gon, Ware, 322; Harmon v. Bell, 22 Eng. L. & E. 62 i The AvolL, 1 Brown, 170; Vandewate1·v.Mill8, 19 How. 82. See The De Binet, 10 .l!'ED. REP.
483, and note, 489
SHIELDS 'lJ. THE MAYOR, ALDERMEN, ETC.
(DiBtrict
8. D. New York.
December 19,1883.)
1.
COI,LISION-WHARVES AND PIERS-PROJECTING BOAT-NEGLIGENCE.
'rhe canal-boat 0., consigned to pier 37, East river, arrived there at 5 A. M. The slip being nearly full, she moored along the south side of the pier, with her bows projecting 20 feet beyond it, into the river. The end of the pier was a usual place of landing passengers in the dark. About 40 minutes before sunrise the steamer M. landed for passengers, as usual, at the end of the pier, and in doing so struck the O. and did some damage, though perceived her in time to.av0id her with due care. Held, in the absence of any rule or regulation, that the O. had a right, under the circumstances, to moor as she did; and that the was chargeable with negligence in striking her.
2. SAME-OUSTOM-LIGHT WHEY MOORED.
It further appearing that it was the custom for a boat so moored, to exhibit a light at night, though no p09itive rule required it, held, that the custom should be enforced as obligatory under such circumstances of special exposure and danger, at a usual landing-place, as a rule of reasonllhle precaution, and that the O. was chargeahle with negligence in omitting the light until sunrise, and the damages were diVided. The cases of The Bridgeport, 14 Wall. 116, and Granite State, 3 Wall. 311, disinguished.
In Admirality. J. A. Hyland, for libelant.
Geo. P. Andrews and,T. B. Olark8on, for respondents. BROWN, J. This action was brought to recover damages for an injury to the libelant's canal-boat, James S. Oakley, on the morning of November 20 l 1880, by the steam-tug Municipal, at the end of pier 37;, East river, at the foot of Market. street. The Oakley had arrived that morning"at5. o'clock, with a cargo of coal consigned to that dock, and the captain, finding the slip,full of boats, so that he could get no furtheJ;,iuside, moored on the lower side of the pier, with the bows of his boat projecting about 15 or 20 feet outside of the, end of the pier iJ;\to.the river; At 6 :20A. M. the Municipalj a tug-boat in th& employ of the respondents, came down the East river and stopped end of ·the pier for the purpose of taking on board laborers, as it had been her daily custom for sometime previous.. In landing at t,he -end of the pier e.he struck the libelant's boat a slight blow, from which .som..edamagEl 8.(1'ose, for which this libel was filec1.· Though there was some dispute as to the time of the collision; it may be .taken as fixed very near the hour of 6: 20, as above stated. Thesun
