CHAPTER III. OF MARITIME LIEN (a); AND HEREIN, (Ss.) 1. Of the Definition and Nature of Maritime Liens. 2. Of their Ranking and Priority inter se. 5. Of Procedure in Admiralty to enforce them. 6. Of the Jurisdiction exercised by the Court of Admiralty under 3 & 4 Vict. c. 65. 7. Concordance of this doctrine with the Maritime Law of other States. * IN the preceding pages we have seen that persons who have rendered services to a ship by their labour as mariners, by pilotage, towage, salvage, and the loan of money on bottomry for repairs or necessaries, may obtain compensation or reimbursement from its owners by proceedings in rem; that is, against the ship itself in the Court of Admiralty. We have seen, also, that the owners of a ship, which has been injured by collision, are at liberty to seek their remedy in a cause of damage instituted in that Court against the ship, to the mismanagement of which the injury is imputed, and that by the marine law, and the maritime codes of foreign nations, the ship is bound (b), that is, affected, with a privileged charge (c), not only for security of the claims above mentioned, but also for the faithful performance by its owners of the covenants into which they have entered with the merchant and freighter. But the precise nature of the privilege, and the * rules which limit and regulate its operation in the Admiralty law of (a) The reader is indebted in a great degree for such elucidation of an important branch of Maritime Law as this Chapter may be thought to afford, to a friendly criticism of Lord Tenterden's work by a learned writer in the Law Magazine, under the signature of H. C. C.,* who was good enough, also, personally to direct the Editor's attention to what he considered to be an omission, and to assist him in supplying it. (b) Ante, pp. 109 & 111, in notes. Ships, by the Code de Commerce (liv. 12, tit. 1, p. 190), are "affectés aux dettes du vendeur et spécialement à celles que la loi déclare privilégiées. See ante, p. 204. The meaning of a privilege is thus explained in the French Code: "Les biens du débiteur sont 66 le gage commun de ses créanciers, et le prix s'en distribue entre eux par contribution, à moins qu'il n'y ait entre les créanciers des causes légitimes de préférence." Code Civil, liv. 3, tit. 18, ch. 1, No. 2093. "Les causes légitimes de préférence sont les priviléges et hypothèques," No. 2094. 'Le privilége est un droit que la qualité de la créance donne à un créancier d'être préféré aux autres créanciers même hypothécaires," ch. 2, No. 2095. "Entre les créanciers privilegiés la préférence se règle par les différentes qualités des priviléges," No. 2096. créanciers privilégiés qui sont dans le même rang sont payés par concurrence," No. 2097. "Les (c) Affectés par privilége, Valin. Comın. sur l'Ordonnance, liv. 3, tit. 1, art. 11. * Mr. H. C. Coote, of Doctors' Commons. England, have been noticed rather as things assumed to be familiarly understood than as requiring discussion and explanation. * A maritime lien-differing, in this particular, like the hypothec of the Scotch law (d), from a common-law lien that it exists without possession, actual or constructive, of the subject on which it is established -is a privileged claim upon a thing in respect of service done to it, or injury caused by it, to be carried into effect by legal process (e). That process issues in this country from the High Court of Admiralty, which takes possession, by its officers, of the ship, freight, or cargo upon which the privilege is alleged, inquires into its merits, and (in the case of several claims) prefers or postpones it, if admitted, according to an order in which the dates of the services rendered, and not the intrinsic value of them, determine their precedence. The simplest illustration of this principle is the case of distinct claims of the like nature, founded e. g. on bottomry bonds. It has been stated, in an earlier part of this Treatise (ƒ), that if two bonds have been given, the last in point of date is entitled to priority of payment, because the last loan furnished the means of preserving the ship; and without it, the former lenders would have entirely lost their security, salvam fecit totius pignoris causam (g). 2. Subject to this preference in respect of posterior date, all liens suable in Admiralty, and arising ex contractu or quasi ex contractu (h), as for wages, pilotage, towage (i), salvage, and bottomry, are esteemed to be equal and co-ordinate. Where, indeed, the Court of Admiralty at the suit of a prior petens decrees the sale of a res, the proceeds of which are exhausted by his judgment, all other creditors who had liens upon it, and who before the decree would have been admitted on their petition to compete with him, are thenceforth concluded, and the res in the hands of its purchaser is discharged of their liens (k); but until decree pronounced the liens of all who have been diligent to submit them to judicial examination take rank, without preference of the creditor by whom the proceedings have been initiated, according to the relative lateness of the service in which they have their origin. He who appears by this test of time to have the prior right or lien in law, will be paid first out of the proceeds of the res on which it attaches; the next, and the next to him, must be satisfied with what remains unforestalled, however insufficient it may be to meet his demand (1). *It is obvious, that in the application of this principle the very (d) Hypothec is a security established by law to the creditor on goods continuing in the debtor's possession. Erskine's Principles. See ante, p. 115. (f) Ante, pp. 123, 486. (g) Ante, p. 123. The Gazelle, 3 Notes of Cases, 79. Which may become salvage under circumstances. The Medora, 1 E. & A. 17; and see the Kingalock, 1 E. & A., in which it was held, that a claim for salvage might be engrafted on an agreement for ordinary, but not on an agreement for extraordinary towage; and that, the condition of the ship having been concealed from the master of the steam-tug, his agreement for ordinary towage was not binding upon him. (k) The Saracen, 2 W. Rob. 453; the same, on appeal to Privy Council, 11 Jur. 255. (1) Constancia, 2 W. Rob. 405, but see the Clyther, 5 Ir. Jur. 317, where the second bondholder had notice of the prior bond. * nature of some liens will often secure to them priority over others. The wages, e. g., of the master and mariners, earned by the service of bringing the ship to her destined port, have insured the eventful value eventue of all services previously rendered, and generally, therefore, will obtain priority over other liens ex contractu or quasi ex contractu, as for salvage, pilotage, towage, or bottomry (m). But cases may arise in which this order would be inverted, and wages antecedently earned, as in an outward or divided voyage, or due under contract at the expiration of stipulated terms, without reference to the ship's arrival at the port of final destination, would be postponed to bottomry or salvage(n). So bottomry takes precedence of prior salvage (o), and gives way to subsequent salvage, wages (p), pilotage, and towage (q). These instances will suffice to exemplify the pervading general rule, that the services which, in the words of Sir John Nicoll, "operate for the protection of prior interests" (r) are privileged above those interests. But bottomry being the result on the part of the lender of a calculation of risk to which the stipulated premium is made commensurate, is not regarded so favourably as other liens ex contractu; and, on the other hand, salvage, a service rendered often at great risk of property and life to the salvors, and without which the res might have been wholly lost with all the liens and interests attaching to it, is liberally considered by the law, yet not so as to obtain priority over subsequent bottomry or wages (s). The maritime lien of damage originating in the wrong of the master and crew of the vessel in fault, and founded on considerations of public policy for the prevention of careless navigation, takes precedence within the limits which the law assigns to the indemnification of the injured party, even though anterior in date,—of liens, ex contractu (t). It absorbs, in the event of the res proving insufficient to meet all demands, the liens of wages, towage, pilotage and bottomry, leaving them to be enforced by proceedings against the persons of the owners. The suitor, in a cause of damage, is entitled to a restitutio in integrum. His claim is preferred to prior bottomry, on the ground that the owner could only hypothecate his vessel subject to its legal liabilities (u). "I apprehend," said Dr. Lushington, in the case of the Aline (x), "that the mortgagee and the bondholder cannot take greater than the owners could confer, viz., a lien on the *security against the owner and all who claim under him. any right *them could be a competitor with a successful suitor in a cause of damage; and for this reason, that the mortgage or bottomry bond might, and often does, extend to the whole value of the ship; if, therefore, the ship was not first liable for the damage she had occasioned, the person receiving the injury might be wholly without a remedy, more especially where the damage is done by a foreigner; and the only redress is by proceeding against the ship. Another reason, that would incline the preponderance in favour of the person suffering the damage, arises from the consideration that he has no option, no caution to exercise, the creditor on mortgage or bottomry has; he may consider all the possible risks and advance his money or not, as he may think most advisable for his own interest. He has an alternative; the suitor in a cause of damage has none. In the case of the bottomry creditor, moreover, the risk that is incurred of losing the security is covered by the amount of the premium he is entitled to demand; and therefore, against a mortgagee or bondholder prior to the period when the damage is done, I think the successful suitor in a cause of damage has a preferable claim to be indemnified" (y). The case in which these observations were made, was one in which the claim of a suitor in a cause of damage was opposed by the lien of a bottomry bondholder for money bond fide lent to repair the wrongdoing vessel subsequently to the collision. The judgment was, that the owner of the innocent vessel was entitled to compensation to the extent of the value of the wrong-doing vessel before the repairs were commenced, and of such subsequent accretions to that value as had arisen from the repairs effected at the expense of the owner, but not of such as had arisen from repairs subsequently done at the expense of a bona fide lender on bottomry without notice of the lien; and the reasoning by which the decision was supported, will illustrate the nice and discriminating equity which governs the adjudication of these questions by the learned Judge, who now so worthily fills the chair of Lord Stowell. "The lender," continues Dr. Lushington, "at the time the application was made to him for the advances, could not possibly tell whether the vessel in distress had committed damage or not. He would, therefore, have to calculate not merely future contingencies, * but to inquire into all past transactions connected with the vessel. (y) 1 W. Rob. 119. To the same effect, and in reference to the facts of the same case, is the dictum of the present Chief Justice of the Common Pleas delivering the judgment of the Judicial Committee of Privy Council in the case of the Bold Buccleugh. "The interest of the first bondholder taking effect from the period when the lien attached, he was, so to speak, a part owner in interest at the date of the collision, and the ship in which he and others were interested was liable to its value at the date of the injury done, without reference to his claim. (adds the learned Chief Justice) by the collision the interest of the claimant attached, So and dating from that event the ship in which he was interested having been repaired was put in bottomry by the master acting for all parties, and he would be bound by that transaction;" that is, to the extent of being excluded from a preference over the lien of a bottomry bondholder in respect of the additional value which had been created by the expenditure of his money on the ship after the collision, but not to the extent of being postponed to a bottomry bondholder in respect of the full value of the ship as it existed at the time of the collision. See Harmer v. Bell. The Bold Buccleugh, 7 Moore's P. C. Cases, 267. *The necessary consequence would be a material increase in the amount of the premium. Again, with regard to the case of the person who has received the damage, is not his interest benefited by the vessel being repaired and enabled to proceed to her port of destination? Is he injured in the amount of his indemnity fund? Not at all. His interest is co-extensive with the right possessed by the owners of the vessel at the time when the damage is done, and his claim is paramount to the extent of her value at that period. With respect to any subsequent accretion in the value, arising from repairs done after the period when the damage was occasioned, his claim to participate in the benefit of such increase of value must depend upon the consideration how that increase arises, and to whom in equity it belongs. Against the owner who repairs his vessel at his own expense, the claim of the successful suitor would extend to the full amount of his loss against the ship and the subsequent repairs; where, however, the repairs have been effected by a stranger upon the security of a bond of bottomry, the case is altogether different; and I cannot hold that, UNIVERSALLY, bonds so granted must give way to prior claims of damage." With respect to a claim for subsequent salvage, in competition with a claim for damage, no decision appears to have taken place. A distinction between the case of salvage, as not supporting an action in personam, and the case of wages, pilotage, and towage, has been suggested by a learned writer (2) as a probable ground of entitling it to more favour than claims for those services when also competing with a lien for damage. But though actions by salvors on the implied contract of a shipowner or goods-owner to remunerate them are now rarely resorted to, they are not unknown to the law, or objectionable in point of principle (a); and should that argument for diversity fail, it would seem difficult to make sure of the ground upon which the lien for damage, founded, like other principles of the maritime law, on grounds of general expedience (b), should be admitted to priority over all other claims for subsequent service, but yield to a claim for salvage. The remuneration awarded by public authority in the Court of Admiralty for salvage service is dispensed in a grateful spirit; the risk of the lives of the salvors, their skill and daring, the wear of the machinery employed by them, and the value of the rescued property, are all remembered in the estimate of their deserts; and the possibility that a vessel in distress may be affected with a claim in respect of damage done by her, would, it may be hoped, have little weight in the calculations of men who, assured of a liberal appreciation (when allowed by law) of their hazardous service, are ready, in all emergencies, to brave the chances of success or failure. The ground, therefore, for * the supposed exception from the rule is not apparent, and the rule is (z) See the article in the Law Magazine above referred to. And see post, p. 540. (a) See the text of Lord Tenterden, ante, p. 6, c. 1, s. 2. See also Newman v. Walters, 3 B. & P. 612, and 2 Chitt. Plead. 54; Smith's Mercantile Law, c. 3, s. 6; and see ante, p. 490. (b) Ante, pp. 522, 523. |