Court Opinion

ID: 8834032
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:13:01.25596+00
Date Added: 2024-06-11T17:05:00.367609
License: Public Domain

On Rehearing.
On August 28, 1923, I rendered the foregoing opinion, in which I sustained the constitutionality of the Ship Mortgage Act of 1920 (Act June 5, 1920, § 30 [Comp. St. Ann. Supp. 1923, §§ 8146¼jjj to 8146¼rr) and held that libelants’ mortgage was a preferred lien under the act.
After rendering this opinion, I granted a rehearing at the request of three intervening petitioners, Bertelsen & Petersen Engineering Company, James J. Kehow, Inc., and Frank J. Doherty, Inc. At this rehearing arguments were addressed to me for the first time assailing the constitutionality of the act, and the question of the validity of libel-ants’ mortgage as a preferred mortgage was further considered.
I am able, therefore, to consider the question of constitutionality in the light afforded, not only by the brief of libelants, but also by the equally able presentation of grounds for declaring the act unconstitutional. But where Congress has expressed by statute its intention to accomplish a certain purpose, this court ought not to declare the act to be beyond the legislative powers of Congress, unless a very clear case is presented. Inasmuch as my opinion, after reconsideration, still inclines toward the constitutionality of the act, I shall not revise my decision on that point. See The Nanking (D. C.) 292 Fed. 642.
I am compelled, however, after careful consideration of the arguments presented at the rehearing and further examination into the federal statutes bearing upon the issues involved, to reconsider and revise that part of my opinion which deals with the status of the Lincoln Land as a vessel of the United States, and to modify somewhat statements appearing in the opinion relative to the recording ol instruments of conveyance under the act.
In my earlier opinion I held that the Lincoln Land was a vessel of the United States. This conclusion was based upon the undisputed fact that the vessel had been duly licensed and enrolled in the port of New York by a former owner, who resided in New York, and also upon a construction of subsection B (4) of the Ship Mortgage Act of 1920, which I am now fully satisfied was never intended by those who enacted the law, and cannot be justified when considered with reference to other maritime acts, as well as to other provisions of the act of 1920.
For example: Section 4131 of the Revised Statutes (Comp. Stat. § 7707) provides that only vessels registered pursuant to law, except such as shall be duly qualified according to law for carrying on the coasting or fishing trade, shall be deemed vessels of the United States, and that no vessel shall enjoy the benefits and privileges of a vessel *364of the United States longer than it shall continue to be owned wholly by a citizen or citizens of the United States or a corporation created under the laws of the United States. Section 4311 of the Revised Statutes (Comp. St. § 8057) provides that vessels of 20 tons or upwards, duly enrolled and having a license in force, and no others, shall be deemed vessels of the United States entitled to the privileges of vessels employed in the coasting trade or fisheries.
Section 4170 of the Revised Statutes (Comp. Stat. § 7751) provides that, whenever any vessel which has been registered is sold, the vessel shall be registered anew; otherwise, she shall cease to be deemed a vessel of the United States.
These statutes have been in force for many years, and have constituted a part of the fundamental law of the United States, created for the protection of its citizens, and to make sure that vessels enjoying the privileges and benefits of a vessel “floating the national flag” shall be owned only by such citizens. These statutes are not repealed by the act of 1920. It is urged by libelants that they have been modified, or nullified, by the act of 1920, and especially by subsection B (4), which reads as follows:
“The term ‘vessel of the United States’ means any vessel documented under the laws of the United States and such vessel shall he held to continue to he so documented until its documents are surrendered with, the approval of the hoard" (the United States Shipping Board). '
The contention is that, the Lincoln. Land having been properly documented at the port of New York under the laws of the United States, it must be “held to continue to be so documented,” there being no evidence tending to prove that its ■ documents had been “surrendered with the approval of the board;” or, to state the proposition in another way, that the Lincoln Land did not cease to be a vessel of the United States by reason of the transfers of ownership, although neither of the new owners, the libelants or the Indian Transportation & Navigation Company, Inc., registered or enrolled the vessel anew. The language of subsection B (4) is certainly broad -enough to give some support to this contention, and it was sustained in my first opinion; but upon reflection I am sure the better view is that the provisions regarding continuation of documentation apply only to vessels subject to a valid preferred mortgage and that the provisions of the ancient statutes, above referred to, are left unimpaired by the Ship Mortgage Act of 1920. This conclusion seems imperative in view of the provisions of subsection O' (a), which reads as follows :
“Subsection O. (a) The documents of a vessel of the United States covered by a preferred mortgage may not be surrendered (except in the case of the forfeiture of the vessel or its sale by the order of any court of the United States or any foreign country) without the approval of the board. The board shall refuse such approval unless the mortgagee consents to such surrender.”
If these provisions of subsection B (4) are not to be confined to vessels which at the time of conveyance are subject to a preferred mortgage, they would work a complete undermining of the whole structure of the vessel law of the United States. Outstanding documents *365■would continue in force, regardless of the number of successive conveyances or of the citizenship of the successive owners. Only by so limiting these provisions can they be brought into harmony with the system of statutory law of long standing, which relates to vessels engaged in foreign and domestic commerce.
The libelants concede that, if their mortgage is to have a preferred status under the Ship Mortgage Act, it must cover a vessel of the United States.
When the Lincoln Land was conveyed by the libelants to the Indian Transportation & Navigation Company, Inc., it had ceased to be a vessel of the United States, for the reason that it had not been registered or enrolled or licensed anew by the libelants in accordance with law; nor was it a vessel of the United States when the mortgage was given by the corporation to the libelants. The mortgage, therefore, was not one which carried with it the benefits or priorities of a preferred mortgage under the statute.
It would not be necessary to consider the question of whether the statute requires recording at the home port of the buyer rather than seller, were it not for the fact that statements contained in my earlier opinion do not stand in view of the construction which I am now persuaded should be put upon the "provisions of subsection B (4) of the Ship Mortgage Act.
R. S. § 4192 (Comp. Stat. § 7778), provides in substance that a bill of sale, mortgage, or other instrument of conveyance of any vessel should be recorded “in the office of the collector of customs where such vessel is registered or enrolled.”
Ever since White’s Bank v. Smith, 7 Wall. 646, 19 L. Ed. 211, it has been settled that this statute required the recording at the home port of the new owner; that is, the port where the vessel should be permanently documented by such owner. The construction which, in my earlier opinion, is placed upon subsection B (4), and which I now deem to be erroneous, required the conclusion that Congress had worked a change in the law as laid down in White’s Bank v. Smith, supra, in that the later act required the instrument to be recorded at the port of last registry or enrollment. The Ship Mortgage Act of 1920, as I.now read it, does not conflict with the provisions of R. S. § 4192, as interpreted by the court in White’s Bank v. Smith, at least so far as they relate to the necessity of recording instruments of conveyance of vessels in the port determined by the residence of the new owner rather than in the port where it had been documented by the former owner.
So far as the provisions of R. S. § 4192, are inconsistent with the provisions of the Ship Mortgage Act of 1920, they are repealed.
White’s Bank v. Smith is authority for the proposition that it is the port of permanent documentation rather than the port of temporary documentation that is contemplated by R. S. '§ 4192. Whether this proposition would hold true under the provisions of subsection C and the definitions of subsection B is not so clear. Subsection C requires the_ recording “at the port of documentation,” and Congress has seen fit in subsection B to define the port of documentation as the port at which the vessel is documented in accordance with law. Subsection B *366(2) defines the word “documented.” Incorporating1 the definition of the • word “documented” in B (3), the paragraph would read as follows:
“The term ‘port of documentation’ means the port at which the vessel is registered, enrolled or licensed, whether permanently or temporarily in accordance with law.”
Inasmuch as the Lincoln Land was not registered, enrolled, or licensed, permanently or temporarily, at any port by the libelants, or by the Indian Transportation & Navigation Company, Inc., until some time after the mortgage had been given and recorded, it becomes unnecessary in this case to determine the extent to which the provisions of R. S. § 4192, have been modified in this respect by the'Ship Mortgage Act.
I have in my opinions dealt only with the claim of the libelants as holders of a mortgage which they claimed to have a preferred status. I have not undertaken to dispose of the rights of the libelants as creditors, or rights of other intervening petitioners. I am leaving all questions relating to these rights until such time as the respective claims shall come on for consideration.