Source: https://law.justia.com/cases/federal/appellate-courts/F2/486/462/287738/
Timestamp: 2019-06-16 21:21:53
Document Index: 505928494

Matched Legal Cases: ['§ 186', '§ 741', '§ 742', '§ 742', '§ 741', '§ 741', '§ 742', '§ 746', '§ 747', '§ 185', '§ 741', '§ 746', '§ 741']

Everett Steamship Corporation, S/a, Appellant, v. Liberty Navigation and Trading Co., Inc.; Ss Galicia Lee, Exss Norberto Capay, Her Engines, Tackle, Etc.; Ss Galiciadefender, Ex Ss Santa Emilia, Her Engines, Tackle, Etc.; Ssgalicia Navigator, Ex Ss Our Lady of Peace, Her Engines,tackle, Etc., and the United States of America, Appellees, 486 F.2d 462 (9th Cir. 1973) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Ninth Circuit › 1973 › Everett Steamship Corporation, S/a, Appellant, v. Liberty Navigation and Trading Co., Inc.; Ss Galic...
Everett Steamship Corporation, S/a, Appellant, v. Liberty Navigation and Trading Co., Inc.; Ss Galicia Lee, Exss Norberto Capay, Her Engines, Tackle, Etc.; Ss Galiciadefender, Ex Ss Santa Emilia, Her Engines, Tackle, Etc.; Ssgalicia Navigator, Ex Ss Our Lady of Peace, Her Engines,tackle, Etc., and the United States of America, Appellees, 486 F.2d 462 (9th Cir. 1973)
US Court of Appeals for the Ninth Circuit - 486 F.2d 462 (9th Cir. 1973)
Five weeks before the seizure in the in rem action and when the Galicia Defender was outside the territorial waters of the United States on her way to Vietnam, Everett filed this action. The complaint alleged that the United States, as demise charterer, was owner pro hac vice, 46 U.S.C. § 186, and that Everett was unable to libel the vessel in rem because of 46 U.S.C. § 741. The complaint claimed a maritime lien on the Galicia Defender and asserted that the lien was enforceable against the Government by a libel in personam under the Suits in Admiralty Act, 46 U.S.C. § 742.
In its answer the Government alleged that the court lacked jurisdiction because the vessel was outside the territorial waters of the district and asserted that 46 U.S.C. § 742 did not apply because no action could have been maintained if the vessel had been privately operated. The Government also stated that the vessel was on its way to Vietnam and would be redelivered to its owner upon its return to the United States.
The District Court dismissed the complaint with leave to amend in an order dated May 28, 1970. Everett then filed an amended complaint in which it also claimed damages against the Government for the loss of priority of its lien because 46 U.S.C. § 741 prevented it from libeling the vessel in rem. On October 6, 1970, the court granted the Government's motion for summary judgment. The court held that Everett's inability to libel the Galicia Defender was because of the vessel's absence from the jurisdiction and not because of any immunity under Section 741. The court also ruled that the arrest and sale of the ship did not violate Section 741.
The Suits in Admiralty Act (the Act) prohibits maritime lienholders from seizing vessels in in rem actions if the vessels are owned or operated by the United States. 46 U.S.C. § 741. As a substitute for recovering against the vessel, the Act allows lienholders to enforce their liens through in personam actions against the Government. 46 U.S.C. § 742. The Act reserves to the United States the benefits of all exemptions and limitations of liability accorded by law to owners, charterers, operators, or agents of vessels. 46 U.S.C. § 746. The Act also seeks to protect government vessels from seizure in foreign ports by giving the Secretary of State discretion to intervene in foreign proceedings. 46 U.S.C. § 747.
As a demise charterer the Government was liable only in rem for debts incurred on the credit of the vessel before the demise charter. When Everett filed its complaint on May 17, 1968, the District Court had no in rem jurisdiction since the vessel was outside the waters of the United States. Blamberg Bros. v. United States, 260 U.S. 452, 43 S. Ct. 179, 67 L. Ed. 346 (1923).
In Eastern Transportation Company v. United States, 272 U.S. 675, 47 S. Ct. 289, 71 L. Ed. 472 (1926), the Government breached its statutory duty to mark the wreck of a government-owned merchant vessel that sank in a navigable channel. Plaintiff's barge collided with the sunken wreck and sank. The trial court held that the sunken vessel did not provide a res which would support an in rem action. The Supreme Court reversed. It held that the breach of the duty to place a marker on the wreck created a direct cause of action in tort against the Government for which plaintiff could maintain an in personam action. When the Government had in personam liability, Section 742 did not require that damages be limited to the value of the vessel under in rem principles.
In Hoiness v. United States, 335 U.S. 297, 69 S. Ct. 70, 93 L. Ed. 16 (1948), a seaman was injured aboard a merchant vessel owned by the United States. The complaint did not allege that the plaintiff was a resident of the district in which the action was brought or that the vessel was within the district when the complaint was filed. The District Court dismissed for lack of jurisdiction. The Supreme Court reversed and held that the provision in Section 742 that the plaintiff be a resident of the district or that the vessel be located within the district related to venue and not jurisdiction.
Everett contends that even if the court did not have jurisdiction when the complaint was filed, it acquired jurisdiction when the Galicia Defender returned to United States waters. Everett cites Warren v. United States, 179 F.2d 919 (2d Cir., 1949), rev'd on other grounds, 340 U.S. 523, 71 S. Ct. 432, 95 L. Ed. 503 (1951), and Carroll v. United States, 133 F.2d 690 (2d Cir. 1943). Both Warren and Carroll were cases in which the Government was liable in personam, not in rem, and Warren's holding was limited to venue, not jurisdiction.
Even if the court did acquire jurisdiction, Everett would not be entitled to any relief. The Government would be liable only for the value of the vessel, just as a private demise charterer in an in rem action. See The Minnesota, 20 F.2d 926, 928 (E.D. La. 1927). Even before its first complaint was dismissed, Everett had already received all the relief to which it was entitled because it had received its pro rata share of the value of the vessel, based on the priority of its lien.
Section 746 reserves to the United States the benefit of all exemptions and all limitations of liability accorded by law to owners, charterers, operators, or agents of vessels. In our opinion Section 746 qualifies Section 741 and allows the Government to permit judicial seizure of merchant vessels chartered by the Government when necessary to enable it to limit its liability according to law. See 46 U.S.C. § 185. The Court in THE ABERFOIL did not consider the interrelation of these two sections.
Section 742 does not give a lienholder greater rights against the Government than it would have against a private charterer. See McMahon v. Pan American World Airways, Inc., 297 F.2d 268, 269 (5th Cir. 1962); see also State of Maine v. United States, 134 F.2d 574, 575 (1st Cir. 1943), cert. denied, 319 U.S. 772, 63 S. Ct. 1437, 87 L. Ed. 1720 (1943), cited in Allen v. United States, 338 F.2d 160, 162 (9th Cir. 1964), cert. denied, 380 U.S. 961, 85 S. Ct. 1104, 14 L. Ed. 2d 152 (1965). Everett was unable to libel the vessel because she was on the high seas, not because it was owned by the United States: Everett would have been equally unable to seize the vessel had it been privately owned. Everett recovered in the in rem action the full amount to which it would have been entitled as a lienholder against a privately operated vessel. It is entitled to no more.
The order granting summary judgment from which the instant appeal was taken was addressed to that amended complaint. It was filed June 17, 1970. Again, it alleged the existence of facts which would support its claim of a maritime lien,3 the time and demise charters to the United States which prevented Everett from seizing or arresting the Galicia Defender and its reliance therefore upon the Suits in Admiralty Act, 46 U.S.C. §§ 741, 742 for in personam relief.4 The majority does not consider the problem. It is content with the explanation that section 742 does not give the lienholder "greater rights against the Government than it would have against a private charterer." Since Everett recovered a pro rata share of the proceeds from the in rem proceeding in which it intervened against the ship, the majority say that it is entitled to no more.
The majority argue that the limitation of liability provision of the Act, 46 U.S.C. § 746, precludes recovery by Everett of any sums in excess of its pro rata share of the total amount of liens against the vessel in the in rem proceeding. They cite McMahon v. Pan American World Airways, Inc., 297 F.2d 268 (5th Cir. 1962). It does not so hold. Nor do any of the cases cited by the Government. What they do hold is that
Even this quoted liability in rem is placed in question by Eastern Transportation Company v. United States, 272 U.S. 675, 47 S. Ct. 289, 71 L. Ed. 472 (1927), where the offending vessel was a complete wreck, yet in personam liability was sustained without limitation.
Under these circumstances Blamberg v. United States, 260 U.S. 452, 43 S. Ct. 179, 67 L. Ed. 346 (1923), does not apply. In that case the vessel against which relief under the Act was asserted, was, at the date of the filing of the libel, in a foreign port where it remained at all times thereafter. Cf. Eastern Transportation Co. v. United States, 272 U.S. 675, 47 S. Ct. 289, 71 L. Ed. 472 (1927); Warren v. United States, 179 F.2d 919 (2 Cir. 1949)
The original complaint as well as the amended complaint asserted maritime lien claims for advances for the payment of crew's wages and furnishing of repairs, supplies and other necessaries. In the amended complaint for the period between February 1, 1967 and February 2, 1968, the amount was alleged to be the sum of $20,040.47. Such advances create maritime liens, 1 Benedict on Admiralty 17-20 (6th ed., 1940), and were the vessel privately owned and operated, a proceeding in admiralty could be maintained to enforce them. Claim was also asserted ex contractu against Liberty, as owner, under Everett's appointment by Liberty as husbanding agent for the ship. A "husbanding agent" or "port agent" is one who assists the vessel and its master in getting in and out of port, purchases supplies and stores, advances funds for payment of wages, procures repairs, etc. Dorn v. Balfour, Guthrie & Co., 155 F. Supp. 203 (N.D. Cal. 1958), aff'd 262 F.2d 48 (9th Cir. 1958)
Suits in Admiralty Act, March 9, 1920, 41 Stat. 525; 46 U.S.C. §§ 741-752. The Act provides in pertinent part: