Martins v. Joseph
THE BERGEN. MARTINS v. JOSEPH
- Proceeding
- district
- Area
- civil
- Panel
- McCormick (author)
Analysis
The court reviewed a special commissioner's report regarding the priority of maritime liens on the steamship Bergen, specifically challenging the status of a mortgage held by George W. Joseph. The court denied the Joseph mortgage preferred status due to improper recording under the Ship Mortgage Act of 1920, granted priority to intervener Harry C. Harley for crew wage advancements, and ordered the distribution of funds in the registry accordingly.
| What the court decided | The model |
|---|---|
The mortgage of the steamship Bergen in favor of George W. Joseph is not a preferred mortgage and does not have priority over other valid maritime liens.“The Joseph mortgage cannot he classified as a preferred mortgage and the lien thereof upon the steamship Bergen does not fall in the category of a preferred maritime lien on *380the vessel as against other valid maritime liens of the libelant and certain interveners.” | agree with court The court correctly applied the Ship Mortgage Act of 1920, which requires recording in the office of the collector of customs of the port of documentation to establish priority. Since the ship was documented in San Francisco but the mortgage was recorded in Los Angeles, the recording was ineffective for priority purposes. |
Intervener Harry C. Harley is entitled to priority over other lien claimants for advancements made to pay crew wages.“His lien takes precedence and is given priority over liens of other interveners and libelant herein.” | agree with court Maritime liens for crew wages are traditionally high in priority. The court found that Harley's funds were used specifically for crew wages, entitling him to the same status as other wage-advancing parties, which takes precedence over subordinate liens. |
The exceptions to the commissioner's report filed by Harley, Johnson, Joseph & G. M. Josselyn & Co., San Pedro Hardware Company, San Pedro Rubber & Supply Company, and Hellows & Stewart are sustained.“The exceptions to the commissioner’s report filed on behalf of interveners Harry C. Harley, Johnson, Joseph & G. M. Josselyn & Co., a corporation, San Pedro Hardware Company, a copartnership, San Pedro Rubber & Supply Company, a corporation, and Hellows & Stewart, a copartnership, are and each is sustained” | agree with court The court disagreed with the special commissioner's decision and adopted its own findings regarding the priority of liens, thereby sustaining the exceptions filed by the parties who benefited from the corrected priority order. |
The money in the registry is to be disbursed with $1,000 paid first to Harry C. Harley, and the remainder paid pro rata to the libelant and other interveners except George W. Joseph.“There shall be first paid to intervener Harry C. Harley the sum of $1,000. The remainder of the moneys in the registry of this court shall then be paid to the libelant and the other interveners, except George W. Joseph, pro rata according to their stipulation made in open court December 29, 1924” | agree with court This distribution order follows logically from the court's determinations on lien priority: Harley gets priority payment, Joseph is excluded from the preferred class (and thus likely receives nothing or is treated as a general creditor outside this specific maritime lien distribution), and the rest share the remainder pro rata as stipulated. |
The order itself: sound — The order correctly identifies the statutory requirement for recording ship mortgages under the Ship Mortgage Act of 1920 and applies it to the facts (recording in Los Angeles vs. documentation in San Francisco). It also correctly applies the principle that liens for crew wages have high priority. The reasoning is direct and supported by the cited statute.
Opinion — McCormick
McCORMICK, District Judge.
I am unable to concur in the decision of the special commissioner to whom this cause was referred. Under the findings of the commissioner and under the stipulation of proctors for the respective parties herein the mortgage of the steamship Bergen, dated May 2, 1922, in favor of George W. Joseph cannot be held to he preferred as against the liens of the libelant and certain interveners.
I find that the prerequisites, under subdivisions C, D, M, and other provisions of the Ship Mortgage Act of 1920 (41 Stat. at Largo, .1000, § 30 [Comp. St. Ann. Supp. 1923, §§ 8146%jjj-8146%jrr]), were not complied with in the Joseph mortgage. An essential to priority and preference is that the mortgage be recorded in the office of the collector of customs of the port of documentation. This was not done in the instant case. The Joseph mortgage was recorded in the office of the collector of customs of the port of Los Angeles;, Gab, on May 2, 1922, but the ship at that time, and at all times until June 28, 1922, was enrolled and documented in the port of San Francisco, Cal., which at all of said times until June 28, 1922, was the home port of said vessel. The recording of the mortgage in the office of the collector of customs of the port of Los Angeles, Cal., on May 2, 1922, was ineffectual and inoperative to constitute the mortgage a preferred mortgage under the Ship Mortgage Act of 1920. For these reasons the Joseph mortgage cannot he classified as a preferred mortgage and the lien thereof upon the steamship Bergen does not fall in the category of a preferred maritime lien on *380the vessel as against other valid maritime liens of the libelant and certain interveners.
The lien of intervener Harry C. Harley, according to the evidence and findings of the commissioner, was for advancements of moneys obtained through Harley’s indorsement of notes, which he indorsed solely upon the credit of the steamship Bergen and solely for the purpose of paying the wages of the crew of said vessel, and the money obtained thereby was actually used in paying the wages of the crew of said vessel. Under these circumstances Harley is entitled to the same status and priority as any other person who advances money to pay the wages of the crew. His contractual relations with Ryan concerning the purchase of the ship are independent, and cannot defeat his right to priority over other lien claimants of an inferior and subordinate class. His lien takes precedence and is given priority over liens of other interveners and libelant herein.
The exceptions to the commissioner’s report filed on behalf of interveners Harry C. Harley, Johnson, Joseph & G. M. Josselyn & Co., a corporation, San Pedro Hardware Company, a copartnership, San Pedro Rubber & Supply Company, a corporation, and Hellows & Stewart, a copartnership, are and each is sustained, and proctor for intervener Harley will prepare under the rules of this court a decree, pursuant to this memorandum, adjudging that the money now in the registry of this court shall be disbursed to tbe parties herein as follows:
There shall be first paid to intervener Harry C. Harley the sum of $1,000. The remainder of the moneys in the registry of this court shall then be paid to the libelant and the other interveners, except George W. Joseph, pro rata according to their stipulation made in open court December 29, 1924, at the hearing on the exceptions to the report of the special commissioner.
Each of the parties shall defray their own costs herein,