Source: https://openjurist.org/293/us/21
Timestamp: 2019-04-19 02:49:14+00:00

Document:
THE THOMAS BARLUM. THE JOHN J. BARLUM. DETROIT TRUST CO.
These are suits in admiralty to foreclose two mortgages given by the Barlum Steamship Company upon the vessels Thomas Barlum and John J. Barlum, respectively. The mortgages purported to be preferred mortgages under the Ship Mortgage Act 1920. 41 Stat. 1000—1006, 46 U.S.C. c. 25, §§ 911—984 (46 USCA §§ 911—984). The mortgagor, appearing as claimant, contended that the admiralty was without jurisdiction. The District Court overruled that contention and, finding that all the requirements of that Act had been met, entered decrees of foreclosure and sale. 56 F.(2d) 455; 2 F.Supp. 733. In the case of the John J. Barlum the decree provided for the recovery by certain seamen, intervening libelants, of amounts due for wages, as preferred maritime liens. The Circuit Court of Appeals reversed the decrees, holding that the suits should have been dismissed for the want of jurisdiction. 68 F.(2d) 946. This Court granted certiorari. 292 U.S. 619, 54 S.Ct. 717, 78 L.Ed. 1476.
Prior to the enactment of the Ship Mortgage Act 1920, the admiralty had no jurisdiction of a suit to foreclose a mortgage on a ship. Bogart v. The Steamboat John Jay, 17 How. 399, 402, 15 L.Ed. 95; Schuchardt v. Babbidge (Ship Angelique), 19 How. 239, 241, 15 L.Ed. 625; People's Ferry Co. v. Beers, 20 How. 393, 400, 15 L.Ed. 961; The Lottawanna, 21 Wall. 558, 583, 22 L.Ed. 654; The Eclipse, 135 U.S. 599, 608, 10 S.Ct. 873, 34 L.Ed. 269; The J. E. Rumbell, 148 U.S. 1, 15, 13 S.Ct. 498, 37 L.Ed. 345.1 If jurisdiction in the admiralty of the present suits is to be maintained it must be by reason of the application and validity of the provisions of the Ship Mortgage Act.
Subdivision (e) of subsection D provides that a mortgage which includes property other than a vessel 'shall not be held a preferred mortgage' unless there is provision for the separate discharge of such property by the payment of a specified portion of the mortgage indebtedness; subdivision (f) of subsection D makes provision for the case of a mortgage covering more than one vessel. And where a mortgage covers property in addition to vessels the Act is not to be construed as authorizing a proceeding in rem in admiralty to enforce the rights of the mortgagee in respect to such property. Subsection N,4 46 U.S.C. § 954 (46 USCA § 954).
An examination of the provisions of the Act leaves no room for doubt that the subject of mortgages of vessels, and, in particular, the priority which should be assigned to them in relation to other liens, was under the close scrutiny of the Congress in determining its policy. But, among all the minute requirements of the Act, we find none as to the application of the proceeds of loans which such mortgages secure. No condition is imposed as to the purposes for which the moneys are lent. While the Congress took care to make distinct provision for cases where a mortgage covers property other than a vessel, no distinction is made as to the status of mortgages of vessels by reason of an intention to devote the borrowed moneys to uses other than maritime. We are not at liberty to imply a condition which is opposed to the explicit terms of the statute. It is enough, so the statute says expressly, that the mortgage is upon a vessel of the United States, that it is a valid mortgage, that it is made in good faith, that it is disclosed by proper indorsements on the vessel's documents and is duly recorded, and that the other conditions, specified in detail, are met. Such a mortgage upon a vessel documented under the laws of the United States, the Congress has undertaken to regulate with respect to priority of lien. If the conditions so laid down are fulfilled, the mortgage is to be a 'preferred mortgage' with all the incidents which the Act attaches to it, including that right to bring foreclosure in admiralty. To hold that a mortgage is not within the Act which the Act itself states is within it, is not to construe the Act but to amend it. The question of policy—whether different terms should have been imposed—is not for us. We may not add to the conditions set up by Congress any more than we can subtract from them. They stand, as defined, precise and complete.
We see nothing in the general purpose of the act which can be deemed to restrict the natural meaning and effect of its language. Rather, the general purpose emphasizes that meaning and effect. The Ship Mortgage Act is a part of the Merchant Marine Act 1920 (41 Stat. 988). Its declared purpose is 'to provide for the promotion and maintenance of the American merchant marine.' The Congress, in its wisdom, decided upon the means to achieve that object and set forth its conclusions in the terms of the statute. The legislative history of the statute shows the controlling considerations. The report of the Senate Committee on Commerce pointed out that 'mortgage security on ships' was 'practically worthless'; that it was proposed to 'make it good except as to certain demands that should be superior to everything else, such as wages'; and that it was desired to have 'our people and capital interested in shipping and shipping securities.' Sen. Rep. No. 573, 66th Cong., 2d Sess., p. 9. The bill, with this purpose, was developed in conference. The managers on the part of the House of Representatives, in their statement accompanying the report of the Committee of Conference, observed that by the enlarged provisions of the bill 'the mortgagee under a mortgage upon a vessel of the United States is made more secure in his interest in the vessel than he is under existing admiralty law,' and, referring to the plan of 'creating a preferred mortgage,' added that 'the preferred status arises upon the recording of the mortgage as a preferred mortgage and its indorsement upon vessel's documents.' There is no suggestion of any requirement as to the use, intended or actual, of the moneys borrowed upon the faith of the mortgage security. H.R. No. 1102, 66th Cong., 2d Sess., p. 34; H.R. No. 1107, 66th Cong., 2d Sess., p. 31.5 The measure was enacted in the terms thus proposed.
2. The validity of the grant of jurisdiction. The Congress rested its authority upon the constitutional provisions extending the judicial power 'to all cases of admiralty and maritime jurisdiction' and conferring upon the Congress the power to make all laws which shall be 'necessary and proper' for carrying into execution all powers 'vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.' Article 3, § 2; article 1, § 8, par. 18.7 This authority was not confined to the cases of admiralty and maritime jurisdiction in England when the Constitution was adopted. Waring v. Clarke, 5 How. 441, 457, 458, 12 L.Ed. 226. The limitations which had been imposed upon the high court of admiralty in the course of its controversy with the courts of common law were not read into the grant. But the grant presupposed a 'general system of maritime law' which was familiar to the lawyers and statesmen of the country, and contemplated a body of law with uniform operation. The Lottawanna, 21 Wall. 558, 574, 575, 22 L.Ed. 654. The Constitution did not undertake to define the precise limits of that body of law or to lay down a criterion for drawing the boundary between maritime law and local law. Id. Boundaries were to be determined in the exercise of the judicial power in recognition of the purpose of the grant. 'No State law can enlarge it, not can an act of Congress or rule of court make it broader than the judicial power may determine to be its true limits.' The St. Lawrence, 1 Black, 522, 527, 17 L.Ed. 180. The framers of the Constitution did not contemplate that the maritime law should remain unalterable. The purpose was to place the entire subject, including its substantive as well as its procedural features, under national control. From the beginning the grant was regarded as implicitly investing legislative power for that purpose in the United States. When the Constitution was adopted, the existing maritime law became the law of the United States 'subject to power in Congress to alter, qualify or supplement it as experience or changing conditions might require.' Panama Railroad Co. v. Johnson, 264 U.S. 375, 385—387, 44 S.Ct. 391, 393, 68 L.Ed. 748. The Congress thus has paramount power to determine the maritime law which shall prevail throughout the country. The Lottawanna, supra, page 577 of 21 Wall., 22 L.Ed. 654; Butler v. Boston Steamship Co., 130 U.S. 527, 557, 9 S.Ct. 612, 32 L.Ed. 1017; Ex parte Garnett, 141 U.S. 1, 13, 11 S.Ct. 840, 35 L.Ed. 631; Southern Pacific Co. v. Jensen, 244 U.S. 205, 215, 37 S.Ct. 524, 61 L.Ed. 1086, L.R.A. 1918C, 451, Ann. Cas. 1917E, 900; Crowell v. Benson, 285 U.S. 22, 39, 52 S.Ct. 285, 76 L.Ed. 598; United States v. Flores, 289 U.S. 137, 148, 149, 53 S.Ct. 580, 77 L.Ed. 1086. But in amending and revising the maritime law, the Congress necessarily acts within a sphere restricted by the concept of the admiralty and maritime jurisdiction. The Belfast, 7 Wall. 624, 641, 19 L.Ed. 266; Panama Railroad Co. v. Johnson, supra; Crowell v. Benson, supra, page 55 of 285 U.S., 52 S.Ct. 285, 76 L.Ed. 598.
The Congress began the exertion of this authority at an early date. In the Judiciary Act of 1789, the Congress conferred upon the district courts of the United States exclusive jurisdiction of all seizures under the laws of impost, navigation, or trade of the United States, where the seizures were made on navigable waters within the respective districts. Section 9, 1 Stat. 76, 77; Waring v. Clarke, supra, page 458 of 5 How., 12 L.Ed. 226; The Margaret, 9 Wheat. 421, 427, 6 L.Ed. 125. By the Act of June 19, 1813, 3 Stat. 2, the Congress declared that a vessel employed in a fishing voyage should be answerable for the fishermen's share of the fish caught, upon a contract made on land, in the same form and to the same effect as any other vessel is liable to be proceeded against for the wages of seamen. Waring v. Clarke, supra. Important illustrations of the exercise of congressional power are found in the Limitation of Liability Act of 1851, 9 Stat. 635, enacted for the purpose of encouraging investment in shipbuilding, by limiting the venture of shipowners to the loss of the ship itself, or her freight then pending, in cases of damage occasioned without the owner's privity or knowledge (Norwich Co. v. Wright, 13 Wall. 104, 20 L.Ed. 585; Hartford Accident & Indemnity Co. v. Southern Pacific Co., 273 U.S. 207, 214, 47 S.Ct. 357, 71 L.Ed. 612); the extension, by the Act of June 26, 1884, § 18, 23 Stat. 57, 58 (46 USCA § 189), of the admiralty jurisdiction to proceedings for the limitation of liability, so as to include damages by a vessel to a land structure (The Plymouth, 3 Wall. 20, 18 L.Ed. 125; Cleveland Terminal R.R. Co. v. Steamship Co., 208 U.S. 316, 28 S.Ct. 414, 52 L.Ed. 508; Richardson v. Harmon, 222 U.S. 96, 101, 106. 32 S.Ct. 27, 56 L.Ed. 110); the Act June 23, 1910, 36 Stat. 604, providing for a maritime lien for repairs or supplies furnished to a vessel in her home port, to be enforced by a proceeding in rem (The General Smith, 4 Wheat. 438, 443, 4 L.Ed. 609; The St. Jago de Cuba, 9 Wheat. 409, 420, 6 L.Ed. 122; The J. E. Rumbell, 148 U.S. 1, 12, 13 S.Ct. 498, 37 L.Ed. 345; Piedmont Coal Co. v. Seaboard Fisheries Co., 254 U.S. 1, 11, 41 S.Ct. 1, 65 L.Ed. 97); the Act of March 30, 1920, 41 Stat. 537 (46 USCA §§ 761—767), providing for jurisdiction in admiralty of suits for damages from death caused by wrongful act and occurring on the high seas (The Hamilton, 207 U.S. 398, 28 S.Ct. 133, 52 L.Ed. 264; Western Fuel Co. v. Garcia, 257 U.S. 233, 243, 42 S.Ct. 89, 66 L.Ed. 210; Lindgren v. United States, 281 U.S. 38, 48, 50 S.Ct. 207, 74 L.Ed. 686); the Seamen's Act of 1915, § 20, 38 Stat. 1185 (Chelentis v. Luckenbach Steamship Co., 247 U.S. 372, 384, 38 S.Ct. 501, 62 L.Ed. 1171); the Merchant Marine Act of 1920, § 33, 41 Stat 1007, amending section 20 of the act of 1915 (46 USCA § 688), thus bringing, in relation to seamen, into the maritime law, rules drawn from the Federal Employers' Liability Act, 45 USCA §§ 51—59 (Panama Railroad Co. v. Johnson, supra; Engel v. Davenport, 271 U.S. 33, 35, 46 S.Ct. 410, 70 L.Ed. 813; Panama Railroad Co. v. Vasquez, 271 U.S. 557, 559, 46 S.Ct. 596, 70 L.Ed. 1085; Northern Coal Co. v. Strand, 278 U.S. 142, 147, 49 S.Ct. 88, 73 L.Ed. 232); and the Longshoremen's and Harbor Workers' Compensation Act 1927, 44 Stat. 1424, 33 USCA §§ 901—950 (Nogueira v. N.Y., N.H. & H.R.R. Co., 281 U.S. 128, 50 S.Ct. 303, 74 L.Ed. 754; Crowell v. Benson, supra).
Of special significance, in relation to the present question, are the Acts of 1884 and 1910, supra. By the former, the admiralty jurisdiction in limitation proceedings was enlarged so as to embrace the liability for a nonmaritime tort. Although the damaged structure was on land, the injury was due to the operation of the vessel, and it could not be said that the Congress had stepped beyond the limits of its authority to amend the law in furthering its policy to encourage investments in ships. Richardson v. Harmon, supra. Compare The Blackheath, 195 U.S. 361, 367, 368, 25 S.Ct. 46, 49 L.Ed. 236. The Act of 1910 created a lien to be enforced in rem for repairs or supplies to vessels in their home ports. The state of the law as it existed be fore that enactment was fully described in The J. E. Rumbell, supra. For repairs or supplies furnished to a vessel in a foreign port, a lien was given by the general maritime law and could be enforced in admiralty, but for repairs or supplies in the home port, no lien existed, or could be enforced in admiralty under the general law, independently of local statute. When the statute of a State gave a lien to be enforced by process in rem against the vessel for repairs or supplies in her home port, that lien, being similar to the lien arising in a foreign port under the general law, was deemed to be in the nature of a maritime lien and therefore could be enforced in admiralty, and, in such case the enforcement of the lien was within the exclusive jurisdiction of the courts of the United States sitting in admiralty. The result was that where necessaries were furnished to a vessel in her home port, the vessel could not be sued in the federal courts under the general maritime law, for that law was not deemed to confer a lien, and could not be sued in a state court for that court could not enforce the lien created by the state law, but the lien so given might be enforced in admiralty.8 The Act of 1910 abolished the artificial distinction between repairs and supplies in a home port and those in a foreign port. While it created a lien where, in the absence of local provision therefor, none had theretofore existed, the change was not deemed to be inconsistent with the general principles of the maritime law and it effected a substitution of a single federal statute for the conflicting state statutes. Piedmont Coal Co. v. Seaboard Fisheries Co., supra. The Act of 1910 also provided that it should not be necessary 'to allege or prove' that credit was given to the vessel; previously, supplies furnished to the vessel at the home port, or on the owner's order, were presumed to be furnished upon his personal credit and created no lien. Id.
The significance of this suggestion cannot be overlooked. The fact that mortgages on ships had not been considered to be maritime contracts was not conclusive as to the constitutional authority of the Congress to alter or supplement the maritime law in this respect, and thus to extend the admiralty jurisdiction, 'as experience or changing conditions might require,' while keeping within a proper conception of maritime concerns. The ship, documented under the laws of the United States, is the instrumentality of our maritime enterprise, the prime object of our maritime policy. The ship 'from the moment her keel touches the water' becomes 'a subject of admiralty jurisdiction'; she acquires personality; she becomes competent to contract, is individually liable for her obligations, and is responsible for her torts. Tucker v. Alexandroff, 183 U.S. 426, 438, 22 S.Ct. 195, 201, 46 L.Ed. 264. The existence of the ship, the investments which make that existence possible, is the necessary postulate of maritime liens. We cannot fail to regard the encouragement of investments 'in shipping and shipping securities'—the objective of the Ship Mortgage Act—as an essential prerogative of the Congress in the exercise of its wide discretion as to the appropriate development of the maritime law of the country. The regulation of the priorities of ship mortgages in relation to other liens, and the conferring of jurisdiction in admiralty in order to enforce this regulation, are appropriate means to that legitimate end.
The enlargement of the cognizance of mortgages of ships, in the admiralty courts in England, nearly one hundred years ago, to which the Court referred in the Bogart Case, was to remedy an evil which had been found to exist. The purpose was 'to enable the Court to exercise its ordinary jurisdiction to the full extent.'10 That Act applied whenever the ship was 'under arrest by process issuing from the high court of admiralty' or the proceeds of a ship so arrested had been brought into the registry of the court, and the court was invested with 'full jurisdiction to take cognizance of all claims and causes of action of any person in respect to any mortgage of such ship or vessel, and to decide any suit instituted by any such person in respect of any such claims or causes of action respectively.' 3 & 4 Vict., c. 65, secs. 3, 4. These provisions were expanded by later legislation. The admiralty court in England has jurisdiction in respect of any mortgage duly registered according to the provisions of the Merchant Marine Act 1894, 'whether or not the ship or proceeds are under the arrest of the Court, and such jurisdiction may be exercised by an action in rem or in personam.' Roscoe's Admiralty Practice (5th Ed.) p. 51.
See, also, The William D. Rice, Fed. Cas. No. 17,691, 3 Ware, 134, 136; The Martha Washington, Fed. Cas. No. 9,148, 3 Ware, 245, 251; The Sailor Prince, Fed. Cas. No. 12,219, 1 Ben. 461, 466; Morgan v. Tapscott, Fed. Cas. No. 9,808, 5 Ben. 252; Britton v. The Venture (D.C.) 21 F. 928; The Gordon Campbell (D.C.) 131 F. 963, 965; The Clifton (C.C.A.) 143 F. 460, 463; The Conveyor (D.C.) 147 F. 586, 589; The Rupert City (D.C.) 213 F. 263, 266.
See Benedict's Admiralty (5th Ed.) §§ 87, 88.
See The Neptune, 3 Hagg. 129 (132).
See, e.g., The Netherlands, Maritime Law, Code of Commerce, 1838; France, Act of July 10, 1885, and Decree of June 18, 1886; Belgium, Laws of August 21, 1879, June 12, 1902, February 10, 1908, and September 4, 1908; Denmark, Maritime Law of April 1, 1892, Act 103 of April 29, 1913, also Act 57 of April 1, 1892; Italy, Maritime Law, Code of Commerce of 1883, and Mercantile Marine Code. 1866, as amended; Norway, Maritime Law of July 20, 1893, as amended by Acts of May 4, 1901, July 13, 1917, and July 9, 1920. See, Constant, 'The Law Relating to the Mortgage of Ships,' Appendix A; 'The Progress of Continental Law in the 19th Century,' Georges Ripert, Maritime Law, Continental Legal History Series, p. 399.
The validity of the Act was not questioned in Morse Dry Dock & Repair Co. v. Northern Star, 271 U.S. 552, 555, 556, 46 S.Ct. 589, 70 L.Ed. 1082, and its validity has been assumed in several decisions in the lower federal courts. See The Egeria (C.C.A.9th) 294 F. 791; The Northern No. 41 (D.C.S.D. Fla.) 297 F. 343; The Red Lion (D.C.E.D.N.Y.) 22 F.(2d) 329; National Bank v. Enterprise Marine Dock Co. (C.C.A.4th) 43 F.(2d) 547; Consumers Co. v. Goodrich Transit Co. (C.C.A.7th) 53 F.(2d) 972.

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