Under the general maritime law, nolien exists for supplies fUl;nished at tbe port of a state of which the ship.o\lVner ,is' a resident. and qtttel!e·. whether the rule is not the same where paI1i of the owners ,residein the state in which is situated such pon.. and others reside in foreign states, the facts beingkndwri to the party furnish. mg the vessel. ' . ,i ' , oontrol or others than the bwner whioh fact is or ought to have been known to a pan.y ,furnishing sUPPlies., a.nd the, p. s.o having the possess.ion. of the vessel resides at the pon,where the sUPl?lie& are furnished, tlJere the same sumption that oredit was not given' to the vessel as in cases where the owner resides at sllch PQrt.. : " '"
2. SAME-CHARTERED VEssJilL,-ltEsWBNT, CHARTEBEB-;f'RBSUMPTION. . . If a'vessel, at the time llupplies her, is in tb.e\lse, possession, and
8.SAMB-BTATU'J:ORY LIBNS-:EJ;OW' ENli'OBOEDnt ADMIBALTY.'
It is because the contract for supplies is maritime that an admiralty court has and e.xereises itS ju.riSdi.ctlon in. enfoi-ci.ng the lien given bytM law of a state for . its security, alld, courts construe and enforce ,such lien in harmony with theirgeneralprincip,lesl and under the same limitations and qualifications as per· tain to'ml\ritlmeliensln'general: ' A ma-terial.man, seeking to enforce against a vessel a lien,for· slJPplies given hy the statute of a state, must establish by proof, as in the case of one furnishing sup. .. , : plies to a foreign vessel, that credit was given to the ship.
II. SAME-CHABTERED VESSEL-ENFOB<:lEMENTOI' LIEN-EQUI'1Y.
The owner of a &team.sliip baving ohartered ·her to a oompany which was a , dent of the same town.. as libelant; chanerexpressly against the creation of any liens on the the oircumstances indicating that libelant supplied 00&· to the vessel knl)Wing that she was under charter. and ·on the credit of the charterers, who subsequently faHeli. heW, .that u<lli$n attached to the ves8el, either under the general maritime lIiw or the statute 1l,nv otMichigan. . ;",.'" T. PBAenoB-AMENDING LIBEL. HeW, that the libel in this case, which claimed alien under the general maritima law, might be amended 80 as to assen a lien under the law of the state. :
SAME-STATEM1ilNT Oll' CAll& .
In Admiralty. Suit to recover the price of coal furnished the steamship Samuel Marshall. BOWfin, Dougla88 &- Whiting, for libelants. Shaw &- Wright, for claimants. Before SEVERENS, District Judge. SEVERENS, District Judge. The libel was filed in this case for the purpose of enforcing a lien upon the steamer, the respondent in the case, for coal supplied by Pittmans & Dean for the steamer's use, in September and on the 1st day of October, 1890. The libelants were coal mer-
cbaI;lts at. Detroit,having a,Qock by the river,at which vessels navigating ihe stream and the waters it il\:mnectscalled for fuel supplies as occasion required. Their. principal office was not located near the dock, but further up, in a more central part ofthe business portion of the city. They employed a foreman, who had .an office at the ,dock, whose duty it was to attend: to the delivery of .coal to steam-vessels, when they would call for it,and to receive payment therefor, if the sale was for cash, or otherwise to keep a memorandum of the amount, and of the name of the vessel supplied; to take a certificate from the master of such amount received by him; and to also obtain from him the name and address of the party to whom the bills should be. sent for payment,-all of wh.ich he reported to the main office. When the coal was furnished on credit, it was the custom of the 'nI';1ll to render by letter addres&ed to the proper party, as indicated by the foreman's report, monthly statements, showing the amount delivered and charged to the vessel, with the captain's certificates confirmatory thereof. In a few days thereafter it was customary tasend a collector to receive payment of bills from parties baving a place of business at Detroit. This method of doing business Was habitual with the libelants. No inquiry was made at the time of furnishing coal as to owners' credit or place of residence, or whether the vessel was being rUn by owners or charterers. or on whose account, except as above stated. The coal was charged upon their books against the vessel, apparently upon the assumption that, if the parties to whom bills were sent diu not pay, they could assert a lien on the vessel. At t.he time when the coal in question was supplied, and during the whole season of navigation that year, the Samuel Marshall was owned by several parties, one ot whom resided at Detroit, and the others at Buffalo and other places in the state of New York. The vessel was enrolled at BUlhllo, and that was duly indicated as the port to which it belonged, by the imprint on of the vessel, pnrs-qantto the requirements of the statute. But during that whole season tbe vessel was under charter-party to J. E. Potts. forthe use of the J. E. Potts Salt & Lumber Company, a Detroit firm, doing a very extensive business, involving the transportation of and Duluth to Buffalo and lumber, ore, coal. grain, etc., from return. Aroong other vessels chartered for .this purpose was the Marshall. The charter was of the bare ship, and by it the charterers undertook to pay, the entire charges of the vessel, and the running thereof, including of the captain and crew, who were also to be employed by the charterers, except that the owners reserved the right to participate ill naming the captain, a stipulation usual in such contracts, and adopted better protection of the interests of the owners in the vessel; and tlll'lrc,was an express stipulation agahlst the'creation of any liens against Coal had heen furnjshed to the Marshall throughout the entire seal!ollof 1890 by the l.ibelants in accordance with the usual cotJrse ousipess as above stlltet1, and the monthly supplies were all paid Com.pany, down to the Ihonth of for.by the J.E. Potts Salt & .In the early part of the seasou:tbe master .of the Marshall t
on taking in some coal, informed the foreman:ofthelibelants, at the dock, of the residence of the owners, and of her being under charter to the Potts Salt & Lumber Company, and gave the name and address of that concern as the party to whom bills should be presented for payment. The office of that company Wl\LS, and had been for some years, within the distance of a block from that of the libelants. The statements were made out and sent to that company monthly, in the way already mentioned, and were paid by them to the collectol'.· On calling for the amount of the July bills the cOqJpany asked for time, and, after conferring with his principals, the collector took the company's acceptance for 60 days, and receipted the bills as so paid, and the acceptanee was duly paid. Bills for the coal included in the present claim, amounting to $1,466, were sent day in the same way to the Salt & Lumber Company, and on,.t>he of November the collector called for payment. The bills included also some Qoal supplied to another steamer employed by that company Time being again asked by the company, the collector received their acceptance, duein 90 days, and receipted the bills as before. He did not, on this occasion, refer to his principals about it,but he took the acceptances to their place of business, and they were deposited in their cash-box. One of them was afterwards deposited in bank for collection. The Salt . & Lumber Company failed on November 24, 1890. !thad doubtless been insolvent for a time further back than the 1st of September, but this was not known to the libelants, who, so far as appears, had no reason to distrust their credit. The;libel counts upon the general maritime law as the foundation of the lien asserted, no reference being made to the statute of the state, which gives a lien for supplies to such vessels, whether furnished to them in the foreign or home port. . It is necessary, therefore, to determine whether, in the circumstances filtated, the libelants have, by the principles of the general maritime law, a lien upon the vessel for the coal thus furnished,and I am Of opinion they have not. It is clearly proven that the vessel was at the time not in the employment ofthe owners,but was manned, controlled, and navigated by the Salt & Lumber Company, under a charter giving them entire possession of the boat, and imposing upon them the obligation to pay all charges incurred by the steamer while in their service. The charterers resided and were doing business at the port of supply. It cannot be denied that if the owners resided at Buffalo where the vessel was enrolled, or if the libelants had good reason to believe so, after due inquiry, and they delivered the coal upon the credit of the steamer, a Jienwould inure to them for the price; and it ,is equally true that if the owners resided at Detroit, and the libelants knew, or ought to have kntlwn\ that this was so, no lien, under the general maritime law, would have arisen, the rule being that, in' the a.bsence of a specific agreement, no lien exists for supplies furnished at the ports of a state whereof the owner is resident, being presumed that they were furnished upon tbecredit of the 'owner, The Gf/M/ral Smith, 4 Wheat. 443; wamw, 21 Wall. 679. It has been held in some cases;thatwhere part
THE SAMUEL MARSHALL.
of the. owners reside in the state of the port where the supplies are furnished, and the others in a foreign state, and the facts are known by the party furnishing the vessel,the same rule would apply as last stated. The Rapid Transit, 11 Fed. Rep. 322,828-330j Stephen80n v. The Francia, 21 Fed. Rep. 715-717j and in The Indiana, Crabbe, 479. I do not decide what the rule is in such cases here, choosing to place my decision . on other grounds. For the purpose of applying the general rules just referred to, reg!trd is had, not so much to the question as to who is the owner of the legal title, as to that of possession and use of the vessel at the time when the supplies are furnished. If the vessel is then in the use, possession, and control of others than the owner, a presumption arises that such others are liable to pay the charges incident to the employment; and if the party furnishing supplies knew, or should have known, the facts in regard to the use and control of the vessel, there is the same reason for the presumption against oredit being given to the vessel, when the charterer, or other person standing in a similar relation to the vessel resides at the port of supply, as in cases when the owner operating the vessel on his own account resides at such port, "and when. there is the same reason there should be the same law." And this doctrine is supported by decisions in well-considered cases. The Goldm Gate, 1 Newb. Adm. 308, 5 Amer. Law Reg. 142; Beinecke v. The Secret, 3 Fed. Rep. 665; The Norman, 6 Fed. Rep. 406; TheSecret, 15 Fed. Rep. 480; Stephenson v. The Francis, 21 Fed. Rep. 715. In regard to the question of fact involved as to whether the libel!lnts knew that the Salt & Lumber Company were using and controlling the Marshall under a charter-party or some similar agreement, my impressions from thp. proof arb strong that they must hM'e kn.own it, or from mere carelessness and indifference neglected to inform themselves of facts which were patent to inquiry. It is claimed that the notice of the fact that the vessel was under charter, given by the masthe other hand, ter to the foreman on the dock, was actual the libelants insist that the foreman was not of such grade of authority !lS to constitute him their agent for, the purpose of receiving such notice. But I do not decide as to this, my opinion being that they knew, or that it should be imputed to them that they knew, the fact which the visible signs plainly indicated. The libelants cannot, therefore, ilucceed ,upon the ground of a lien under tbe general maritime law. But it is suggested that the libel be amended so as to assert a lien under the law of the state. This is opposed by tbe claimants. for the reason, as alleged, that it makes a wholly different case. In my opinion, the case is one wbere, .within the rules and practice of the court in regard to 'amendments, it may properly be'allowed, if that, indeed, is neCeS5i1ry, as seems to be supposed. Dupont v. Vance, 19 How. 162; The Mary Ann, 8 Wheat. 380; Warren v. Moody, 9 Fed. Rep.fl73; The Mornitng Star. 14 Fed. Rep. 866. The change is only, with reWlrd to fhe source of tHe lien, in. point. of law, asserted by tbe . The
FEDERAL REPORTER,' vol. .4,9.
proof,woulanot be different, and there can be no: surprise.' If the prOict19t .forthe libelants considers suchan amendment necessary, the libeL may be. amended; . This will enable the court to decide thecnse upon, its merits, according tMhe lllwdeemed applicable thereto. ,[t:was claimed at the hearing that the state statute (2 How. Ann.. St. § 8236)W8S of general application, and gave a lien ina11 cases when supplies, etc., were furnished, and the course of business of the libelants its customers seems to have been pursued with such .an understanding of the law. They. supposed they could, finally resort to the vessel, if the parties to whom they looked for payment should fail to pay. But,. in my opinion, this position is untenable. The statute must be construed with reference to the general principles relating to the subject. It declares that vessels shall be subject to a lien for all debts contracted by the owner, part owner, master, clerk,agent, or steward on account of supplies furnished for the use of the vessel. By the ordinary rule of construction, the words following "the owner" should be taken to be such persons ilsstand in relation to the owner, and presumably having his authority to incur. the debt contracted, and not the subordinates and agents of others. It has been generally understood that the principal purpose of the local statutes of the states of a like character was to extend to those supplying domestic ships the same privilege which is accorded to those supplying foreign ships. The statute in terms extends to all eases alike, whether ,the vessel is foreign, in which case the lien exists by the admiralty law, or whether the vessel is domestic. Was it by the statute to supplant the admiralty law, and supply a system of its own? That eannot be supposed. Such "statutes have never been thought to have any such effect. The jurisdiction of the admiralty courts has been extended over the liens created by those statutes in favor of those furnishing supplies at the home port, because the contracts upon which they were furnished were maritime in tbeir nature, and in-exercising such jurisdiction the courts have applied the general principle applicable to maritime cases. They take cognizance of those statutes only to the extent of recognizing the creation or. alien thereby. They ignore altogether the method prescribed for its enforcement. They adopt their own procedure, and enforce the lien, together with other rights brought under judgment in the case, according to the rules and doctrines peculiar to their own jurisdiction. They do not by their decrees,administer the lien according to the statute. No referl.'nce is made to it in the award or distribution or other disposition by judgment. As was said by Mr. Justice in a leading case in· this circuit, (The Guiding Star. 18 Fed. Rep. 263:) U Lnenforcing the statutory lien in admiralty cases, the admiralty courts do not adopt the statute itself) or the construction placed upon it by the courts of common law or equity, where they apply it." It isbecauB.e the contract: for supplies ..is: maritime that the court has and exercises its jurisdiction in enforcing the lien given for its security. The Lottawanna, 21 Wall. 058, 580. The court does
" CTHE "SAMUEL MARSHALL·
. not have jurisdiction orit: il:S an independent thing; that is tOBBy, disassociated from the contract, The lien is an incident to the debt, and is inseparably connected W'ithit, reflecting its qualities. This being so, will the admiralty courts treat the lien thus recognized as superior and privileged over others? Should it have intrinsic authority, without regard to the facts upon which others are allowed to prevail? Will the lien be given effect contrary to the reason and practice of the court, as exhibited in rules and doctrines its long experience has evolved? Or does the court aaopt the lien, clothing it with the same attributes, alid holding it under the same limitations, as are applied to other maritime liens? It would seem that it might lead to incongruous results and serious conflict and diffictllty, if the latter be not regarded' as the sound rule. It is only in thus dealing with such liens that the priorities given by the maritime law in the admiralty cout'tscsn be upheld. It was declared by HOFFMAN, J., in his opinion in: PM Columbus,5 Sawy. 487, that there was no reaflon for thinking that such statutes were intended to do more than to give domestic material"men the same protection which the maritime law afforded to foreignmilterial-men, or for thinking that it was intended to withdraw demands of the former from the operation oithe general rules and principles by whichmal'itime liens are governed. This view finds support in the opinion of Mr. Justice CURTIS in The Young Mechanic, 2 Curt. 404; and this leads to pretty nearly the same result as that which I deduce from the general principle and course of decision in the admiralty courts in enforcing maritime liens, namely, thllt those courts willfor themselves construe the statutory lien, and enforce it in harmony with their general principles, and under like limitatiolls and qualifications as pertain to maritime general. But there are other cases, one ormore, in which different views would seem to have been adopted, 'and a more enlarged effect given to the loctll statute. I have not o\Terlooked the reasons given for the different result, but my own views remain as stated,after full consideration of the subject. If tbepropositions already advanced are correct, it would follow that the libelants' must establish by proof that, as in the Case of one fu'mishjng such supplies to a foreign vessel, they gave credit to the ship. The Lottatoanna,21 Wall. 581. My opinion is that in point of fact they did not, and that the credit was given to the Potts Salt & Lumber Company, with the supposition that, by force of. the transaction, the libelants would have alien upon the vessel. This iSi}uiteadifferent thing fi'om giving credit totbe vessel. That the goods were charged on their books to the steamer:is: of little significarice.This Was' their habitual method· of business in their office. A similar feature existed, and was commented upon in Beinetkifv. TM Secret,3Fed. Rep. 665, 667, and in The MariJ Morgan, 28 Fed. Rep. 196, 201. The existence of the lien must therefore be denied.' " ' But Ishauld be broughttothe,satn.eresultif I ",ere to adopt a broader of the statute,; !1ndintetpret' /Lnll'giveeffect to it 'upon the .... ,;. : '., . ,
pripciplesof courts oflaw and equity. It is a condition to the acquisi. tion of Ii. valid lien upon the property ofanother that it should be acquired in good faith and with due respect to his rights. It :bas already been pointed out that by a familiar rule ofconstruction, of general applicMion, the subordinates mentioned in the statute as the persons upon whose contracts a lien will attach upon the Iihip are those standing in the relation of agents to the owner. Under ordipary circumstances, the subordinates, b&ing emploYedabout and UP0J;l the sbip,might fairly be to have theowner'sp,uthority, and the party supplying would have his lien, betrusted to· appearances for which the owner was responsible. But th!3 merchaJ;ltis,pres\:lmed.to know that it is a common thing for a sel to he hire<i, and to be managed and used, in the employment of others, undercharter-p/trtywiththe owner or otherwise, under stances where the obligation for supplies does not rest upon the owner. And if the facts presented to him are sufficient to induce a reasonably prudent man, having a just regard to the rights and interests of others, to suppose it probable that t4e owner 'is not employing the vessel, but that it is in the service of .under charter or other agreement volvingthepayment of cha),'ges and expenses by thechnrterer or lessee, he is bound in good faith to inquire, When the circumstances denote that the '()wnerof .thevesselis not the party for whose interest the plies are furnished, and would not beat fault if they were not paid for, it would be inequitable that a ,merchant should have the right to give credit to another, and assert a lien therefor, contrary to the stipulations and interests ofthe ,owner. And, hlmy opinion, the same rule requiring the exerciseof good faith is applicable ill giving due and eflect to the clause found at the end of 8ection4286, Rev. St. U. S.,-a section forming part of the provisions of the law limiting the liability of shipowner,s, if, indeed, has a wide! scope than the impl¢iate subject-matter with which the c()ntext merchant is under no obligation to furnish the su He may do so or not, and he may sell for cash or on credit, as he thinks. advantageous to himself. If he does furnish and on .credit, in the face ()f an agreement between otbersof which he has notice, devolving. the obligation of payment upon another than the owner, an? denying to the charterer the right to hypothecate the ship, he ought not to be allowed to a lien upon the owner's. property. And, in my opinion, the facts w,ere here sufficient to apprise the libelants that the vessel was not in the service of the owner, or at least to have put them upon inquiry as to how the fact,walil·. They had notice ofits place of enrollment by the name thereof painted upon the stern. The Martha W(18hington"l Cliff. 463; The Superior, 1 Newb. Adm, 181. They knew that.the supplies were ,furnished in the expectation of payment from the Salt & Lumber Company of Detroit. They knew that credit had beer. by themselves tllatcompany, and for supplies pre-: viously furnished. All the circumstances indicat.ed the Salt & LumberCompanywelfe' in theiro\,Vn and not as agents. The'ir giving their o;wp paper on time was strong evidence of this. There is a moral probability arising from the fact that they knew
the Salt & Lumber Company bad, for a considerable time, been engaged in an extensive business involving the employment of vessels. Express notice of want of authority to make such a contract as will hypothe.cate the vessel is not necessary to defeat an attempt to accomplish that end. The language of Mr. Justice CLIFFORD, in delivering the opinion of the court in The Lulu, 10 Wall. 192, 201, is applicable here, where he says, in discussing the obligation of good faith which the merchant or lenders must obser.ve:. "It is well-settled law that a pllrty to a transaction, where his rights are liable to be injuriously affected by notice, cannot willfUlly shut his eyes to the means of knowledge which he knows are at hand, and thereby escape the consequences which would flow from the notice if it had actually been received; or, in other words, the general rule is that knowledge of such facts and ciras are s.utlicient to put a party upon inquiry. and to show that. if he had exercised due diligenCe, he would have ascertained. the truth of the case, 'is equivalent to actual notice of the matter in respect. to which the inqui!'1 ougl:lt to have been made." As maybe observed, in reaching the conclusion at which I have arrived,I have waived (as I have several other questions which have presented themselves along the way) all consideration of the grounds of defense of payment. or suspension of the right of action, by the giving and "recei-ving of time acceptances of the Potts Salt & Lumber Company for the supplie8 in question, which had not matured when the libel was filed. For the reasons given lam of opinion that the libelants must faU upon the principal issues in the ease, and that the libel should be dia-
8ron Co. ".
THE CLYDE, THE NASHoTAB,and THE
· ' .. ;.' ..1 I \ .1
. ' . '.
-, ,; , . "
Tows., ' "":,,, , ' ' Asteamel,";wbich had :In,!!t taken on4'(;a1'g'o Ort Ii dock in the Cb,icago river,sWung out into the stream tor tnepurpose ot oii'her voyage, whereupon two tugs, , Eiach' toWf'i1g a oilnal.l:i6at; ,appt-Oached' ,lfrom opposite di"eotio:tl$. As SOOIl 'allJl!he perceived the tugs, the steamer stopped, and, swung, her llow,JIo$Jar as llhe,conld towards tbe sq.orel there being anothervessel,betwee,n her an,d", t1l,e Shore., 'Th,Ei two e tugs passed each otbeJ"hetweenthe,lrtieamer "lJ,Qre, 3Ild their two .. tne stellmer was not in, fault, but. tbat both tugs were tow.scollldell., to blame for attempting to cross llttnat' point,8lld that ellchtug should bear ha.lf theloS8.'" ", ,"", ",' , ,',' j ,
In Admiralty. ·Libei by the Illinois Stone Company lIgainst the"propeller the canalpropeUerNashotlih, aDd the cll;tl.lJ,bboat W. 'J. Roebuck, fbtthimages-C8usedby a collision., ' libelant., , ,',-;'" '. ,'.c"i"", John a. Richberg, for respondents.
BLODGETT, District Juc1ge. The libelant in this case seeks to recover damages sustained by him, as owner of the canal-boat Hogan, by reason of a collision which occurred between the Hogan and the canal-boat Roebuck, on the waters of the Chicago river, on the evening of the 31st of July, 1889, whereby the Hogan was sunk. The proof in the case shows that just before the collision the steam-propeller Clyde, having taken on a cargo of over 60,000 bushels of wheat at what is known as "Keith's Elevator," a short distance above the Halsted-Street bridge, and on the east side of the south branch of the Chicago river, cast ofl' her forward lines, and started her wheel for the purpose of swinging out into the river in order to start on her voyage; that the schooner Helen Williams lay directly below the berth at" the dock occupied by the Clyde. ,The Clyde's bow swung out into the stream past the Williams, and probably some distance into the river, when the whistle of the canal-tug . Nashotah was sounded for the draw of the Halsted-Street bridge, the Nashotah coming up the river with the Roebuck in tow, both lumber laden. The master of the Clyde at once took measures to swing the bow of his boat back towards the dock, but was unable to swing her entirely back against the dock, by reason of her having lapped partly against the
JReported by Louis Bolsot, Jr., Esq., of the Chicago bllr.