Carpenter v. Tietjen & Lang Dry Dock Co.

HOUGH, Circuit Judge (after stating the facts as above). It is difficult to review a matter that went through the trial court in defiance of all procedural law. For instance, it is settled that when the owner, or person entitled to claim, defaults on the return day of process under a libel in rem. such default is a formal admission by him of the truth of the allegations of the libel, and of a lien in libelant’s favor on the vessel itself. The Water Witch (C. C.) 44 Fed. 95, per Wallace, J. Of course, such default may be collusive, and for the very purpose of establishing as a lien something entitled to no privilege. If any other party interested is in a position to claim the vessel, and as claimant answer the libel, he may do so, on proving his right to claim and giving proper security. But if he desires only to assert a claim to or in the res superior to that set forth in the libel, he may intervene under [357] Admiralty Rule 34 (267 Fed. xv), and on giving security answer appropriately. (The difference between claimants and interveners is set forth by Brown, J., in The Two Marys [D. C.] 12 Fed. 152.) Obviously Tietjen & Lang could not claim, but they could have intervened, This, so far as shown, they never did; but without giving any security have been permitted to act like interveners. Again there never was a trial of Carpenter’s cause of action by the court, but without any pleading in denial of the libel, with no issue framed, it was sent to a commissioner to find out how much each libel-ant was owed, and what was the order of priority; the report gives no facts as to what is owing by any one to Carpenter, but holds in effect that the libel ought to be dismissed because there never was a lien. Yet the final decree does not dismiss Carpenter. Result is that on an appeal which is a new trial, we take what is in the record, plus admissions at bar, and begin again. Carpenter gave ample proof that he had advanced large sums to get the Merrill out of the difficulties above referred to; also, that he procured from the owner a written agreement that what he had furnished or would furnish was advanced on the credit of the vessel. Whether such advances plus such written agreement established a good conventional maritime lien, without evidence of the application of the advances to the extinguishment of maritime liens, is a question not necessary to decide. The William & Emmeline, 1 Blatch. & H. 66, Fed. Cas. No. 17,867. This libel goes much farther, and so did libel-ant’s attempted proof, for the allegation is that Carpenter’s money was furnished and used for paying off in foreign ports most pressing maritime liens. That such advances ordinarily obtain the lien and rank of the demands satisfied is perfectly settled. The Dunlap, 1 Low. 350, Fed. Cas. No. 513; The Guiding Star (C. C.) 18 Fed. 263, per Matthews, J. Of course, the lender must look to the credit of the ship; but plainly this libelant did that; there is no evidence supporting the intent attributed to him by the commissioner’s first finding. But it is argued that since the schooner was mortgaged for more than she was worth she had no credit This is merely untrue; she had. credit for maritime Hens; because a mortgage is not maritime, and every maritime lien is superior to it, unless superiority is avoided by some matter of estoppel or laches, Consequently the only reason for refusing a lien to Carpenter for so much of his money as paid off good liens is that he was a mortgagee. This, we take it, is what is meant by the commissioner’s second finding — that advances were made only to protect “his own interest,” i. e. Carpenter's interest as mortgagee. This is identifying a mortgagee with the owner; for it is plain that if an owner discharges a lien, he has extinguished it; or else it is treating a mortgagee like a shareholder in a corporate owner. It is upon the line of cases relating to the last suggestion that appellees rest. They are summed up in The Natchez (D. C.) 236 Fed. 588, where previous decisions on both sides are collated. We express no opinion [358] on them, because we perceive no resemblance between the relations to the thing owned of a shareholder in the corporate owner and of a mortgagee of the res. The decisions just referred to illustrate the modern tendency toward treating a shareholder as an equitable part owner in that to which his corporation has title, but any mortgagee is a secured creditor and no more until (in the case of a ship) he takes possession and exercises dominion — when he becomes an owner pro hac vice. The Dunlap, supra; Calumet, etc., v. Equitable, etc. (D. C.) 275 Fed. 552. It is possession and not even holding the record title that changes the mortgagee’s status (Morgan v. Shinn, 15 Wall. 105, 21 L. Ed. 87), and there is not the slightest evidence that Carpenter ever took possession of the Merrill. On reason therefore the holding of a mortgage does not preclude one from doing what any stranger to the title may do in respect of liens. As for authority, The Pauline (D. C.) 136 Fed. 815, shows a mortgagee taking possession for the purpose of paying off the crew, and then successfully asserting their lien against the ship. It is probably true that Carpenter advanced what he did because he held a mortgage, which was in great danger of being lost in foreign parts. He prevented the equivalent of a marshal’s sale abroad and enabled the ship to get home; the law protects him in so doing. To that extent he rightly acted for his own interest. We hold that the owners having defaulted, and no proper intervention been made, Carpenter is entitled to a maritime lien for such of his moneys as extinguished maritime liens, with interest. As to priorities we express no opinion further than to point out that Tietjen’s lien certainly and Kessel’s probably did not arise on the same voyage as that which gave rise to the liens paid off by Carpenter. Decree reversed and the matter referred to William Parkin, Esq., to ascertain the amount of Carpenter’s lien and the order of priorities as between Carpenter and the other lienors reported below. Mandate to issue after confirmation of report hereby ordered; appellant to recover costs of this court against Tietjen & Eang and Kessel Companies.