Source: https://supreme.justia.com/cases/federal/us/254/1/
Timestamp: 2019-04-19 00:37:24+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 254 › Piedmont & Georges Co. v. Seaboard Fisheries Co.
Piedmont & Georges Creek Coal Company v.
lien for furnishing supplies "to a vessel . . . upon the order of the owner" under the Act of June 23, 1910, c. 373, § 1, 36 Stat. 604, because the coal furnished the vessel was furnished by their owner, and not by the coal dealer, p. 254 U. S. 6 et seq.; (2) that the fact that such maritime use had been contemplated did not render the subsequent appropriation by the owner a furnishing by the coal dealer to the several vessels, p. 254 U. S. 8; nor (3) was the understanding of the owner and the dealer that the law would afford a lien of any legal significance a against the purchaser under the mortgage. P. 254 U. S. 10. To hold that a maritime lien for the unpaid purchase price of supplies arises in favor of the seller merely because the purchaser, who is the owner of a vessel, subsequently appropriates the supplies to her use would involve abandonment of the principle upon which maritime liens rest and the substitution therefor of the very different principle which underlies mechanics' and materialmen's liens on houses and other structures. P. 254 U. S. 8.
The Atlantic Phosphate & Oil Corporation owned a fleet of nineteen fishing steamers. It owned also factories at Promised Land, Long Island, and Tiverton, Rhode Island, to which the fish caught were delivered and at which its vessels coaled. When the fishing season of 1914 opened, the company was financially embarrassed. Its steamers and factories had been mortgaged to secure an issue of bonds. Bills for supplies theretofore furnished remained unpaid. The company had neither money nor credit. It could not enter upon the season's operations unless some arrangement should be made to supply its vessels and factories with coal. After some negotiations, the Piedmont & George's Creek Coal Company, then a creditor for coal delivered during the year 1913, agreed to furnish the Oil Corporation such coal as it would require during the season of 1914, the understanding of the parties being that the coal to be delivered would be used by the factories as well as by the vessels, that the greater part would be used by the vessels, that the law would afford a lien on the vessels for the purchase price of the coal, and that the Coal Company would thus have security. Shipments of coal were made under this agreement from time to time during the spring and summer, as ordered by the Oil Corporation. In the autumn, receivers for the corporation were appointed by the District Court of the United States for the District of Rhode Island, and later, a suit was brought to foreclose the mortgage upon the vessels and factories. At the time the receivers were appointed, five cargoes of coal shipped under the above agreement had not been paid for. The Coal Company libeled twelve of the steamers, asserting maritime liens for the price and value of either all the coal or of such parts as had been used by the libeled vessels respectively.
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 held that the Coal Company had a maritime lien on each vessel for the coal received by it. The William B. Murray, 240 F. 147. The circuit court of appeals reversed these decrees with cost and directed that the libels be dismissed. The Walter Adams, 253 F. 20. Then this Court granted the Coal Company's petition for a writ of certiorari. 248 U.S. 556.
was no understanding between the companies when the agreement to supply the coal was made or when the coal was delivered that any part of it was specifically for any one of the several vessels libeled, or that it was for any particular vessel of the fleet, or even for the vessels then composing the fleet. Indeed, the first shipment was stated on the invoice to be "coal for factory." The negotiations of the Oil Corporation with the Coal Company did not 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 Land, which received four of the five shipments, the bins already contained other coal (1,068 tons) which had been theretofore purchased by the Oil Corporation and had been paid for. With this coal on hand that delivered by libelant was commingled. At each plant, both the vessels and the factory were from time to time supplied with coal from the same bins; but the greater part of the coal supplied from each plant was used by the vessels. Weeks, and in some instances months, elapsed between placing the coal in the bins and the delivery of it by the corporation to the several vessels. When it made such deliveries, it furnished coal to the vessels, as it did to the factories, not under direction of the Coal Company, but, in its discretion, as owner of the coal and of the business.
proved; but to what extent the coal supplied to the several vessels which bunkered at Promised Land came from the 1,068 tons previously purchased, and to what extent it came from the lots purchased from the Coal Company, it was impossible to determine. In making the computations which formed the basis of the decrees in the district court, it was assumed that, of the coal supplied to the several vessels which bunkered at Promised Land, a proportionate part of that received by each had come from the coal purchased from libelant.
The Coal Company contends on these facts that it furnished necessary supplies to the several vessels 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 of the fleet and this use of the coal by vessels of the fleet was a use which had 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.
The fact found by the lower courts that the parties understood the law would afford a lien on the vessels for the coal is, in this controversy, without legal significance. If the coal had been furnished to the several vessels by the libelant, maritime liens would have arisen and could have been established under the statute without proof that credit was given to the vessels. Since the libelant 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., 241 F. 57.
Newport, 114 F. 713; The Alligator, 161 F. 37; Astor Trust Co. v. E. V. White & Co., 241 F. 57, 61, each vessel so receiving supplies may be made liable for the supplies furnished to it. The Murphy Tugs, 28 F. 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.
statute for the conflicting state statutes."
The act relieves the libelant of the burden of proving that credit was given to the ship when necessaries are furnished to her upon order of the owner, but it in no ways lessens the materialman's burden of proving that the supplies in question were furnished to her by him upon order of the owner or of some one acting by his authority. The maritime lien is a secret one. It may operate to the prejudice of prior mortgagees or of purchasers without notice. It is therefore stricti juris, and will not be extended by construction, analogy, or inference. The Yankee Blade, 19 How. 82, 60 U. S. 89; The Cora P. White, 243 F. 246, 248.
consistent with the instructions of the order and intentions of the parties giving and accepting it."
And in respect to the coal supplied, the court there found specifically that "The quantity to be supplied to and daily consumed by the Yankee was mentioned and considered by the parties. . . ." In the case at bar, there was no understanding when the contract was made, or when the coal was delivered by the libelant, that any part of it was for any particular vessel or even for the vessels then composing the fleet. And it was clearly understood that the purchasing corporation would apply part of the coal to a nonmaritime use. The difficulty here (unlike that presented in The Vigilancia, 58 F. 698; The Cimbria, 156 F. 378, 382, and The Curtin, 165 F. 271) is not in failure to show that the coal was furnished to the vessels, but in failure to prove that it was furnished by the libelant.
It was also argued that the parties made an express agreement that the Coal Company should have a lien -- that is, that they created by agreement a nonstatutory lien. The concurrent findings of fact by the lower courts, which we accept (Baker v. Schofield, 243 U. S. 114, 243 U. S. 118; La Bourgogne, 210 U. S. 95, 210 U. S. 114; The Germanic, 196 U. S. 589, 196 U. S. 595) are to the contrary.
"Any person furnishing repairs, supplies, or other necessaries, including the use of drydock 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."
Compare Van Stone v. Stillwell & Bierce Mfg. Co., 142 U. S. 128, 142 U. S. 136. See O'Conner v. Warner, 4 Watts & S. 223, 226; Bolton v. Johns, 5 Pa. 145, 150; Taggard v. Buckmore, 42 Me. 77, 81; Buck v. Brian, 2 How. 874, 881; Montandon v. Deas, 14 Ala. 33, 44; Mochon v. Sullivan, 1 Mont. 470, 473.
See "Confusion in the Law Relating to Materialmen's Liens on Vessels," 21 Harvard Law Review, 332, and "The New Federal Statute Relating to Liens on Vessels," 24 Harvard Law Review, 182, both by Fitz-Henry Smith, Jr.

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