Court Opinion

ID: 9336380
Source: CourtListenerOpinion
Date Created: 2022-12-15 21:50:29.68721+00
Date Added: 2024-06-11T17:15:12.122802
License: Public Domain

SANBORN, Circuit Judge
(after stating tlie facts as above, delivered the opinion of (he court.
The questions presented in this case turn upon tlie legal effect of the discharge of the engine, boilers, and machinery upon the appraisal and bond on March 10, 1897. If that discharge released this property from the maritime liens of those who had not then tiled their libels in the court below, the decrees were erroneous; but if it left these liens unimpaired, and discharged the property from the liens of those who were then, parties to the proceedings only, they were right. The theory of the appellants is that the bond of March 4, 1897, became a substitute for the engine, boilers, and machinery as to all who claimed maritime liens upon this property, whether they had presented their liens in the court below or not when the bond was given and the machinery was released. Upon-this theory they insist Urn i tlie court erred in refusing to include the Int.er-Oc.ean Coal & Coke Company, or its assignee, and the Hawgood & Avery Transit Company, among the distributees of the proceeds of that bond, although neither of them had filed any libel against, or pleaded any lien upon the machinery or the vessel when this bond was given, and they contend that tie seizure of the machinery under the subsequent libel of tin1 coal and coke company and the decree that the wrecking company and the sureties on its bond shall pay the claim of that company are erroneous, because, as they say, the machinery was discharged of all maritime liens by the substitution of the earlier bond in its place on March 10, 1897. When a ship which lias been arrested under a libel is released upon an appraisal and a deposit, or a bond, or a stipulation, not given under the limited liability act, the deposit or bond or stipulation is substituted for tlie vessel as to all those who have then filed their libels and become parties to the proceeding, but as to no other parties. The proceeds of the deposit, bond, or stipulation inure to the benefit of those who were parties to tlie proceeding when the release was made. But they inure to the benefit of no others. The vessel is discharged from the liens of these parties, and from their liens only. Lienholders who have not filed their libels, and have not become parties to the proceeding when the ship is discharged, may not be permitted to share in the *1014proceeds of the deposit or bond or stipulation, and their liens are neither detached nor affected by the release. The vessel returns to the claimant subject to the maritime liens of all who were not parties to the proceeding before the discharge was made, and they may libel and arrest her to enforce their liens to the same extent and with the same effect as though she had never been seized before. Rev. St §§ 940, 941; Adm. Rules, 11, 26; The Langdon Cheves, 2 Mason, 58, Fed. Cas. No. 8,063; The Union, 4 Blatchf. 90, Fed. Cas. No. 14,346; The Antelope, 1 Ben. 521, Fed. Cas. No. 481; The Haytian Republic, 57 Fed. 508, 509; Id., 154 U. S. 118, 14 Sup. Ct. 992; The Oregon, 158 U. S. 186, 15 Sup. Ct. 804. If the transit company in the case at bar had claimed both the hull and the machinery of the steamer, and had procured, the appraisal and given the bond for the entire res, and the vessel and machinery had both been discharged thereunder, the right of the coal and coke company to subsequently libel her and to enforce its lien by seizure and sale of every part of the vessel and of the machinery could not have been successfully questioned under these authorities. The reason for this rule is that the maritime lien of that company had attached to every part of the ship and to every part of her machinery before any libel was filed against her, and the acts of third parties in seizing her and releasing her on an appraisal and bond could not' affect the right and lien of this company in its absence, and without its consent. On this ground all the authorities are that, if the entire thing had been libeled and discharged here, the lien of the coal and coke company would have remained untouched. How, then, could a discharge of a part of this thing have a greater effect than the release of the whole? Every reáson which tends to support the lien of the absent holder when the entire thing is discharged pleads with equal cogency for its maintenance when only a part is released. The lien attaches to every part as much as to the whole. If one-half, two-thirds, or any other portion of the res is destroyed, the maritime lien still adheres to the remnant that has escaped, and no persuasive reason occurs to us why it should not hold as firmly every part which has been released from a seizure made by strangers to pay. their debts. Any other rule would permit the first libelants and the owner to destroy the value of the liens of all others by an appraisal and discharge of the valuable part of the thing seized, leaving, as in this case, nothing but a worthless remnant for their satisfaction. Every consideration of reason and of equity demands that the same rule should apply to a discharge of a part which governs the release of the whole. Our conclusion is that a release to a claimant under an appraisal and stipulation or bond, not made under the limited liability act, of a part of the res seized under a libel in admiralty, has the same effect upon the liens upon the part released that a discharge of the entire res under a like appraisal and stipulation or bond would have had upon the liens upon the whole thing. The result of this conclusion is that there was no error in the decrees of the court below. The coal and coke company was not entitled to share in the distribution of the proceeds of the bond given by the transit company on March 4, 1897, as the claimant of the engine, boilers, and machinery, because it had not *1015filed its libel when they were discharged under that bond. The transit company had no right to share in the proceeds of that bond as the assignee of the maritime lien of the Phenix Iron Works, because it had not filed any libel to enforce that lien, nor had it pleaded the same, or made any claim upon it in any way, when the engine, boilers, and machinery were discharged under that bond on March 10,1897. The course of the transit company was this: It appeared on March 5, 1897, and filed a claim for the engine, boilers, and machinery, in which it alleged that it was the owner thereof. On March 6, 1897, it filed a petition for leave to intervene, in which it pleaded that it had an interest in the vessel by reason of a mortgage. But it was not until May 8, 1897, that it firsi presented to the court below the claim that it liad a maritime lien which it had derived from the Phenix Iron Works. The engine, boilere, and machinery had then been discharged under the bond of March 4’, 1897, and it was too late for the transit company to present a claim to share with the libelants who were parties to the canse on March 10, 1897, in the proceeds of a bond which they had secured for their own benefit. Not only this, but the transit company was prevented from asserting such a claim as against those libelants by the fact that it had induced them to accept its bond, and to return to it the engine, boilers, and machinery, by its silence regarding the maritime lien it now urges, and by its positive averment.in its claim to the property that it was the owmer of it. Chase v. Driver, 92 Fed. 780. Moreover, the transit company did not present its claim to enforce this maritime lien in a libel or a cross libel. It merely pleaded it in its answer. When the machinery was released by the order of March 10, 1897, it undoubtedly went back to this company, subject to all the maritime liens that liad not been presented to the court below before the property was discharged. That company might have filed a libel or a cross libel, and it might have caused this machinery to be arrested upon the maritime lien it now presses. But it could not have acquired any right to enforce that lien, or t.o share in the distribution of the proceeds of the engine, boilers, and machinery, or in the proceeds of a bond or a stipulation taken for them by other parties, by simply setting it forth in its answer. Respondents in a libel suit are required to file a cross libel, to take out process, and have it served in the usual way, if they have maritime liens which they desire to enforce. Ward v. Chamberlain, 21 How. 572, 574. The coal and coke company pursued the proper and legal course to enforce its lien. After the machinery had been released from the liens of all the libel-ants who had appeared in court before March 10, 1897, it caused the engine, boilers, and machinery to be arrested upon a monition issued upon a libel against the ship and its machinery, which it filed subsequent to that date. The decree of the court below that its lien existed, and that the wrecking company and its sureties were liable upon the bond which they gave to abide by and perform the decree upon this libel, was in accordance with the rules and principles of law to which we have referred, and both the decrees below must be affirmed. It is so ordered.