Copyright USGenNet Inc., 2015 All Rights Reserved USGenNet Data Repository Please read USGenNet Copyright Statement on this page: Transcribed and submitted by Linda Talbott for the USGenNet Data Repository http://www.us-data.org/ =========================================================================== Formatted by USGenNet Data Repository Chief Archivist, Linda Talbott All of the above information must remain when copied or downloaded. =========================================================================== N.Y. Weekly Digest of Cases Decided in the U.S. Supreme, Circuit, and District Courts, Appellate Courts of the Several States, State and City Courts of New York and English Courts, Vol. IV pub. Campbell & Co., New York - 1877 [471-473] LIENS, PRIORITY. U.S. District Court. W.D. Michigan Miller v. The Tug ALICE GETTY. Decided April 9, 1877. In the absence of local statutory provisions, a mortgage upon a vessel is not entitled to priority over maritime liens. The tug belongs at Muskegon, in this State, and most of the libels are for supplies, repairs, &c., furnished in Michigan. She was accustomed to take tows across the lake, and there is one libel for supplies furnished in Chicago, besides several for seaman's wages. The original libellant's claim is for necessaries furnished the tug, in Michigan. For this claim a decree was obtained and the tug sold. A number of intervening libels were filed before sale, and a number of creditors asserted their liens after sale upon the proceeds. Besides these, Rogers petitioned to have the proceeds applied upon two mortgage liens. The filing of his mortgages in the Custom House ante- dated nearly all the other lien claims. The clerk's report gives priority to the strictly maritime liens, viz., seaman's wages and the claims for supplies furnished out of the State. After satisfying these and the costs, there is a surplus. Then preference is given to liens under the State law asserted before sale of the tug. There is still a surplus, and this is given to the mortgage claims, to the exclusion of domestic liens asserted after sale against the proceeds. These latter creditors except to the report because they are postponed to the mort- gage creditor, and the mortgage creditor excepts to the report because his lien is postponed to those domestic liens which were asserted by intervening libels before sale. Rogers, the mortgagee, insists that he is entitled to rank next to those liens established for seamen's wages and the foreign creditor. Held, That the mortgage lien was not entitled to priority. The Michigan statute giving the lien on domestic vessels, fixed their priorities over mortage liens. §§ 6,678, 6,679. If the State may give the lien, we do not see why it may not fix the rank as between the several domestic and mortgage lien creditors. But if the statute was silent on the subject, the principles of the maritime law would postpone mortgage liens to all maritime claims, where, by the general maritime law or by the local law a lien is given. It would not be claimed that a purchaser of a vessel could successfully assert a claim to proceed against either class of maritime claims. Viewed in the pro- per light, a mortgagee is a purchaser subject to a condition by the mortgagor will defeat the mortgagee's title. Now nothing is better settled than that a mortgage on a vessel creates no maritime claim; on the contrary, the mortgage represents an ordinary debt, to which are attached no maritime rights whatever, and can no more be enforced in admiralty courts than can a judgment or execution lien in favor of a creditor who has, through proceedings in a State Court, levied on the vessel. The mortgage gives a lien, and so does the levy, but neither can operate to deprive maritime claims, for which the local or mari- time law gives a lien of superior rank and claim to priority, and this rests upon that measure of public policy in favor of those who supply vessels with necessary things to enable them to proceed on their voy- age, without which marine commerce could hardly be sustained, and be- cause the supplies are supposed to be to the advantage of both owners and creditors of the vessel. The only standing a mortgagee can obtain in a proceeding in admiralty is against the remnant in the registry, and this only by petition under the 43d admiralty rule. If a mortgagee wishes to avoid claims arising against the mortgaged vessel, he should take possession and avoid debts; but if he lets her sail, he understands the necessity which may arise for supplies and repairs on the credit of the ship, and he can no more defeat those debts by asserting his mortgage than could a purchaser. He is benefited by any repairs, and may be by ordi- nary supplies which enable the ship to proceed on her voyage, and thus save her freight. Exceptions filed by the mortgagee overruled, and exceptions filed by the lienors sustained. Opinion by WYTHE, J. ===========================================================================