CHAPTER IV.

OF THE JURISDICTION OF THE ADMIRALTY OVER PROCEEDS IN THE REGISTRY.

WHEN a vessel or other property against which a suit is brought, is sold, and the proceeds brought into the registry, the power of the court to distribute these proceeds is unquestioned, but the right of the court to decree that third persons who could not have proceeded against the property in rem, may receive a proportion of the proceeds of that property to satisfy their claims against the owner, does not seem to us to be clearly settled on principle if it is on authority, and the growth of the power of the admiralty courts, in this particular, is to be attributed to a desire, on their part, to mitigate the hardships imposed on material-men by the jealousy of the common-law courts.

Thus, in England, prior to the passage of a late statute, material-men could not enforce their lien against the vessel in ̧ admiralty; but at one time they were permitted to receive on their petition the amount due to them from the surplus proceeds in the registry.1 The power of the court to decree payment out of the proceeds in such a case, when the payment was opposed by the owners, was soon afterwards denied.2 And although the authority of this case was denied, and the old rule maintained

1 See cases cited 3 Hagg. Adm. 148, note. In most, if not in all of these cases, however, no appearance was made in behalf of the owners. In The John, 3 Rob. Adm. 288, the court decreed, in the case of a foreign ship, that a material-man might have payment of the proceeds in the registry, but denied the right to a general creditor of the owners, on the ground that the nature of the accounts rendered his demand more fit for a court of chancery. The court said: "The court of admiralty would not attempt to interfere where the demand itself is the subject of a dispute, which the powers of a court of equity are alone competent to settle."

2 The Maitland, 2 Hagg. Adm. 253.

by Sir John Nicholl, a short time afterwards,1 yet his decision was reversed by the privy council, on the ground that there was no difference between the right of action against proceeds, and that against the thing itself, where the claim is opposed by the owner, or by a person claiming under him, as a mortgagee in possession. And a mortgagee, not in possession, has also been denied a share of the proceeds. But where a vessel which had been seized by the sheriff on execution, was taken by the officers of the court of admiralty, and sold by order of that court, and the sheriff petitioned that the balance of the proceeds after the judgment in the admiralty court had been satisfied, should be paid over to him, the privy council, on appeal, decreed that it should be done in preference to paying the balance to the owner.4

In this country a more liberal policy has been pursued, and the general principle has been laid down, that where proceeds are rightfully in the possession and custody of the admiralty, “it is an inherent incident to the jurisdiction of that court to entertain supplemental suits by the parties in interest, to ascertain to whom those proceeds rightfully belong, and to deliver them over to the parties who establish the lawful ownership thereof."5 It is not, however, to be understood that in this country the general creditors of the owner may, by petition, claim the proceeds in the registry, but the right is limited generally, at least, to those

1 The Neptune, 3 Hagg. Adm. 129.

2 The Neptune, 3 Knapp, P. C. Cas. 94. This decision was followed in the case of The New Eagle, 2 W. Rob. 441, where the court refused the petition of one who alleged that he had advanced a sum of money for the service of the vessel in the payment of seamen's wages, etc., and ordered the proceeds to be paid to the mortgagees. • Dr. Lushington, referring to the case of The Neptune, said: "After that decision, it is impossible to make a distinction between the proceeds and the ship itself."

The Portsea, 2 Hagg. Adm. 84; The Exmouth, id. 88, note.

The Flora, 1 Hagg. Adm. 298. This case is generally cited as an authority to the point, that a judgment debt in a common-law court, may be proved against the proceeds in admiralty. And the authority for this inference is the remark of the court that, "although the court of admiralty cannot enter into the contracts of general creditors, yet it may be bound to take a judgment on record as a debt." The decision seems, however, to have rested mainly on the ground that the right of the sheriff against the proceeds, on an attachment, was not lost by a sale under the admiralty court, their judgment being satisfied.

5 Andrews v. Wall, 3 How. 568, 573, per Story, J.

whose debt "is either of itself, or in its origin a lien on the ship, or other thing out of which the moneys were produced." 1

Where the lien is waived by intendment of law, or is lost by a neglect to enforce it within the proper time,3 it has been held that the claim may be enforced against the proceeds. But some courts have gone farther, and it has been held that after the liens are all satisfied out of the proceeds of the sale, the surplus funds remaining in court are subject as against the owner to the claim of the master, although he can only sue in personam, for wages. And in another case, a stevedore, who, we have seen, cannot sue either in personam or in rem,5 was allowed to have his claim paid out of the proceeds after all other claims were satisfied. It has also been held that the admiralty will take jurisdiction in matters of account between part-owners in respect to the surplus proceeds; but this doctrine, we think, is not supported on principle or on authority.

No distinction seems to be made in this country between the right of a mortgagee in possession, and one who is out of possession, but the proceeds are given to either in preference to the owner or a general creditor, on the ground that the mortgagee has a lien at law.8

A surety on a bond or stipulation in admiralty, who has paid the money in accordance with the decree of the court, stands in the place of the original debtor, and is entitled to the proceeds after the claims for which the vessel was libelled are paid. But his right is no greater than that of the original debtor, and his

1 Gardner v. The Ship New Jersey, 1 Pet. Adm. 223, 226.

2 Zane v. The Brig President, 4 Wash. C. C. 453. See also, The Boston, Blatchf. & H. Adm. 309, 328.

3 The Stephen Allen, Blatchf. & H. Adm. 175.

The Santa Anna, Blatchf. & H. Adm. 79.

6 See ante, Vol. I. p. 489.

6 Emerson v. Proceeds of The Pandora, 1 Newb. Adm. 438. But in the case of The Ship Panama, Olcott, Adm. 343, where the owner of the vessel claimed the right to the proceeds against the mortgagee and had paid the claim of a stevedore, it was held that he could not deduct the amount from the proceeds due the mortgagee. 7 The L. B. Goldsmith, 1 Newb. Adm. 123.

8 Harper v. The New Brig, Gilpin, 536; Leland v. Ship Medora, 2 Woodb. & M. 92; The Ship Panama, Olcott, Adm. 343; Remnants in Court, id. 382. The right of a lien creditor is, however, preferred to that of a mortgagee. Justi Pon v. The Proceeds of the Brig Arbustci, U. S. D. C., New York, 6 Am. Law Register, 511.

claim to the proceeds is postponed to creditors who have liens on the property.1

And where a sum of money in court has been decreed to be paid to a libellant, the court will not, on application of a creditor, appropriate it to a debt due by the libellant.2

1 Carroll v. The T. P. Leathers, 1 Newb. Adm. 432.

2 Brackett v. The Hercules, Gilpin, 184.

CHAPTER V.

OF THE PRINCIPLES OF ADMIRALTY JURISPRUDENCE.

WE shall endeavor to treat of these in connection with the several topics which we have before enumerated. We divided them into three classes; the first of which consisted of those suits in admiralty which arise from private and civil claims, grounded on maritime contracts, either express or implied, or on maritime torts or trespass. The list of these is long; because it enumerates nearly or quite all the topics which are embraced in the law of shipping. In treating of that subject, we were sometimes obliged to state by anticipation the principles of admiralty jurisprudence; and as the admiralty court takes cognizance in this country of nearly all the cases or questions which can arise under the law of shipping, and in the far greater number of instances applies the same principles as the common-law courts, we have necessarily exhibited these principles in treating of that topic. What we purpose to do now, therefore, is to state what is peculiar to courts of admiralty, omitting whatever is common to them and courts of common law, because stated elsewhere, so far as we are able to do this, and leave what we have to say of admiralty intelligible. It will be impossible to avoid all repetition, but we shall do so as far as we can.

SECTION I.

OF THE RIGHTS AND DUTIES OF SHIP-OWNERS.

It has been held in admiralty in England, that a party holding a regular bill of sale of a ship, has the legal title, and is entitled