The law of the sea

by George L. Canfield; J. Y. Brinton; George W. Dalzell

10. Lien for Repairs and Supplies.—

By act of Congress approved June 23, 1910, provisions were made which substantially changed the law as it existed theretofore. This act was repealed and reënacted with amendments by the Merchant Marine Act of 1920 (see Appendix). The latter act (Sec. 30), representing the present state of the law, provides:

Subsection P. Any person furnishing repairs, supplies, towage, use of drydock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.

Subsection Q. The following persons shall be presumed to have authority from the owner to procure repairs, supplies, towage, use of drydock or marine railway, and other necessaries for the vessel: The managing owner, ship's husband, master, or any person to whom the management of the vessel at the port of supply is intrusted. No person tortiously or unlawfully in possession or charge of a vessel shall have authority to bind the vessel.

A person furnishing supplies or repairs to a vessel in the absence of her owners or temporary owners, and elsewhere than in her home port, and upon the order of the master, should inquire into the necessity for the supplies or repairs. If, upon reasonable inquiry, he finds that they are necessary, he may safely furnish them, relying on the credit of the vessel and upon his right to a maritime lien upon her. If reasonable inquiry fails to show any necessity, the supplier or repairer will not be entitled to a lien, even though the master gave the order.

In the case of the Valencia, 165 U. S. 264, the home port of the ship was Wilmington, North Carolina. She was plying between New York and Maine. Coal was ordered for her in New York, not by the master, but by a steamship company doing business in New York whose relations to the vessel were not inquired into by the suppliers of the coal. If they had inquired, they would readily have learned that the steamship company was a charterer of the vessel and was bound by the charter party to "provide and pay for all coals." The coal was not paid for and the suppliers libeled the ship. In directing the libel to be dismissed the Supreme Court said:

Although the libellants were not aware of the existence of the charter party under which the Valencia was employed, it must be assumed upon the facts certified that by reasonable diligence they could have ascertained that the New York Steamship Company did not own the vessel, but used it under a charter party providing that the charterer should pay for all needed coal. The libellants knew that the steamship company had an office in the city of New York. They did business with them at that office, and could easily have ascertained the ownership of the vessel and the relation of the steamship company to the owners. They were put upon inquiry, but they chose to shut their eyes and make no inquiry touching these matters or in reference to the solvency or credit of that company. It is true that libellants delivered the coal in the belief that the vessel, whether a foreign or a domestic one, or by whomsoever owned, would be responsible for the value of such coal. But such a belief is not sufficient in itself to give a maritime lien. If that belief was founded upon the supposition that the steamship company owned the vessel, no lien would exist, because in the absence of an agreement, express or implied, for a lien, a contract for supplies made directly with the owner in person is to be taken as made "on his ordinary responsibility, without a view to the vessel as the fund from which compensation is to be derived." The St. Jago de Cuba, 9 Wheat. 409. And if the belief that the vessel would be responsible for the supplies was founded on the supposition that it was run under a charter party, then the libellants are to be taken as having furnished the coal at the request of the owner pro hac vice, without any express agreement for a lien, and in the absence of any circumstances justifying the inference that the supplies were furnished with an understanding that the vessel itself would be responsible for the debt incurred. In the present case, we are informed by the record that there was no express agreement for a lien, and that nothing occurred to warrant the inference that either the master or the charterer agreed to pledge the credit of the vessel for the coal.

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We mean only to decide, at this time, that one furnishing supplies or making repairs on the order simply of a person or corporation acquiring the control and possession of a vessel under such a charter party cannot acquire a maritime lien if the circumstances attending the transaction put him on inquiry as to the existence and terms of such charter party, but he failed to make inquiry, and chose to act on a mere belief that the vessel would be liable for his claim.

The law is even more succinctly stated in the case of the Kate, 164 U. S. 458, as follows:

The principle would seem to be firmly established that when it is sought to create a lien upon a vessel for supplies furnished upon the order of the master, the libel will be dismissed if it satisfactorily appears that the libellant knew, or ought reasonably to be charged with knowledge, that there was no necessity for obtaining the supplies, or, if they were ordered on the credit of the vessel, that the master had, at the time, in his hands, funds, which his duty required that he should apply in the purchase of needed supplies. Courts of admiralty will not recognize and enforce a lien upon a vessel when the transaction upon which the claims rests originated in the fraud of the master upon the owner, or in some breach of the master's duty to the owner, of which the libellant had knowledge, or in respect of which he closed his eyes, without inquiry as to the facts.

If no lien exists under the maritime law when supplies are furnished to a vessel upon the order of the master, under circumstances charging the party furnishing them with knowledge that the master cannot rightfully as against the owner, pledge the credit of the vessel for such supplies, much less one is recognized under that law where the supplies are furnished, not upon the order of the master, but upon that of the charterer who did not represent the owner in the business of the vessel, but who, as the claimant knew, or by reasonable diligence could have ascertained, had agreed himself to provide and pay for such supplies, and could not, therefore, rightfully pledge the credit of the vessel for them.

Where a charterer becomes the owner pro hac vice, as usually occurs in the case of a "bare-boat" charter, necessary supplies ordered by the master will entitle the supplier to a maritime lien under the statute, unless the charter party contains stipulations that were known to the supplier or which he could have readily ascertained, excluding such liens. Thus in the latest decision of the Supreme Court in which the act of June 23, 1910, was construed (South Coast S. S. Co. v. Rudnbach, decided March 1, 1920) a bare vessel was chartered to one Levick, the contract stipulating that Levick was to pay all charges and save the owners harmless from all liens. There was also a provision that the owner might retake the vessel in case Levick failed to discharge any liens within thirty days, and a provision for the surrender of the vessel free of all liens, if Levick failed to make certain payments. The master of the ship had been appointed by the owner, but was under Levick's orders. When the supplies were ordered representatives of the owners warned the supplier that the steamer was under charter and that he must not furnish supplies on the credit of the vessel. He disregarded the warning and furnished the supplies and libeled the vessel for his lien. The Court upheld his right to the lien, holding that the warning of the owner was ineffectual because the charterer had become the owner pro hac vice, the master being his agent and not that of the owner, and that:

Unless the charter excluded the master's power the owner could not forbid its use. The charter-party recognizes that liens may be imposed by the charterer and allow to stand for less than a month, and there seems to be no sufficient reason for supposing the words not to refer to all the ordinary maritime liens recognized by the law. The statute had given a lien for supplies in a domestic port, and therefore had made that one of these ordinary liens. Therefore the charterer was assumed to have power to authorize the master to impose a lien in a domestic port, and if the assumption expressed in words was not equivalent to a grant of power, at least it cannot be taken to have excluded it. There was nothing from which the furnisher could have ascertained that the master did not have power to bind the ship.