U.S. Supreme Court People's Ferry Company of Boston v. Beers, 61 U.S. 20 How. 393 393 (1857)
People's Ferry Company of Boston v. Beers
1 U.S. (20 How.) 393
APPEAL FROM THE CIRCUIT COURT OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
The admiralty jurisdiction of the courts of the United States does not extend to cases where a lien is claimed by the builders of a vessel for work done and materials found in its construction.
Whether the district courts can enforce a lien in such cases, where the law of the state where the vessel was built gave a lien for its construction, is a question which the Court does not now decide.
[MR. CHIEF JUSTICE TANEY, HAVING BEEN INDISPOSED, DID NOT SIT IN THIS CAUSE.]
The facts of the case are stated in the opinion of the Court.
MR. JUSTICE CATRON delivered the opinion of the Court.
This was a libel filed by Beers & Warner as assignees of Crawford & Terry, the builders, against a new steam ferry boat called the Jefferson for a balance due the builders on account of work done and materials employed in constructing the hull of the vessel. It is alleged that Crawford & Terry contracted to build for Wilson Small, of New York, three ferry boats, at Keyport, New Jersey, for $12,000 each; that they built one of them, to-wit, the Jefferson; that they have a lien for the unpaid balance of the price, and that the vessel is now in the Southern District of New York.
Process having been issued, the People's Ferry Company, of Boston, intervened as owners, and filed their claim and answer, denying the facts alleged.
On the trial, the defendants proved and put in evidence a written agreement for building the hulls of three vessels, between Wilson Small, who was building under a contract for the Ferry Company, and Crawford, by which the latter was to construct, build, and deliver at New York City, the hulls of the three vessels. The contract provides that the boats and materials, as soon as the same may be fitted for use, shall be the property of Small, subject only to the lien of Crawford for such sum or sums of money as may be due under the contract.
When the Jefferson was nearly finished, she was taken to New York and delivered to Small, to receive her engine; and afterwards, Crawford & Terry assigned their claim to the libellants, Beers & Warner. The balance due to the builders was over seven thousand dollars, and for this sum the libellants obtained a decree of condemnation.
The only matter in controversy is whether the district courts of the United States have jurisdiction to proceed in
admiralty to enforce liens for labor and materials furnished in constructing vessels to be employed in the navigation of waters to which the admiralty jurisdiction extends.
The lien reserved by the contract is not set up in the libel, nor can it avail, as it amounted to nothing more than a mortgage on the vessel for a debt. Bogert v. John Jay, 17 How. 400. Nor could a maritime lien for work and materials be claimed by the local law, as no statute creating any lien existed in New Jersey when the vessel was built. We have then the simple case, whether these ship carpenters had a lien for work and materials, that can be enforced in rem in the admiralty?
The district court held:
"That it is very clear that the admiralty law creates a lien in favor of a party who does work or furnishes supplies to a foreign ship, and that a ship owned in another state is foreign."
"That in determining the question whether such lien is created also in favor of the builder of a ship, as well as of him who furnishes work and supplies to her after she is built, the court is not controlled by the restricted jurisdiction of the admiralty courts of England, as exercised by them under the supervising power of the common law courts. The rules and principles of the admiralty law, as administered by the admiralty courts of this country, are more enlarged -- more in conformity to the principles of the civil law, as administered by the maritime nations of continental Europe."
"That according to that law, the interests of shipping and ships, not only in their creation, but in their preservation, are of paramount importance; that the importance of this consideration is the reason why the materialman who furnishes supplies for the preservation of the ship is entitled to a lien, and there is the like reason for giving a lien to him who has furnished necessaries to bring the ship into being."
"That the English law gives only the common law possessory lien to a materialman or to a builder; but the maritime law of continental Europe gives a maritime lien to those who build, supply, or repair, a ship, at least where she is a foreign ship. This is expressly stated by Boulay Paty, and this principle was acted upon for a long time by the English admiralty before it was overthrown by the courts of common law."
"That the right of a materialman who has furnished necessaries for the preservation of a foreign ship has been repeatedly acknowledged by the admiralty courts of this country, and as the like reason exists why a carpenter should have a lien on that which by his work and materials he creates as on that which he preserves, after he has created it, and as by the general
maritime law a lien exists in the one case as in the other, the court must hold that Crawford & Terry had a lien upon the boat for the work done and materials furnished in building her."
Foreseeing that the cause would be brought up by appeal to this Court, the circuit judge merely acquiesced in the decision of the district court and affirmed its decree.
The question presented involves a contest between the state and federal governments. The latter has no power or jurisdiction beyond what the Constitution confers, and among these, it is declared that the judicial power shall extend "to all cases of admiralty and maritime jurisdiction," and by the Judiciary Act of 1789, this jurisdiction is conferred on the district courts of the United States. The extent of power withdrawn from the states and vested in the general government depends on a proper construction of the constitutional provision above cited. Its terms are indefinite, and its true limits can only be ascertained by reference to what cases were cognizable in the maritime courts when the Constitution was formed -- for what was meant by it then, it must mean now; what was reserved to the states, to be regulated by their own institutions, cannot be rightfully infringed by the general government, either through its legislative or judiciary department. The contest here is not so much between rival tribunals as between distinct sovereignties claiming to exercise power over contracts, property, and personal franchises.
How largely these may be involved in the contest is most apparent when we take into consideration that the admiralty courts now exercise jurisdiction over rivers and inland waters wherever navigation is or may be carried on, and extends to almost every description of vessel which may be employed in transporting our products to market. Over all these the admiralty jurisdiction is now exercised in proper cases, and the question is whether the contract before us is a proper case and within the grant of federal jurisdiction. The contract is simply for building the hull of a ship and delivering it on the water. The vessel was constructed and delivered according to the contract, and was in the possession of the party for whom it was built when the libel was filed.
The admiralty jurisdiction, in cases of contract, depends primarily upon the nature of the contract, and is limited to contracts, claims, and services purely maritime and touching rights and duties appertaining to commerce and navigation. 1 Conckling M.L. 19.
In considering the foregoing description, it must be borne in mind that liens on vessels encumber commerce, and are discouraged,
so that where the owner is present, no lien is acquired by the materialman; nor is any where the vessel is supplied or repaired in the home port. The lien attaches to foreign ships and vessels only in favor of the carpenter who repairs in a case of necessity and in the absence of the owner. It would be a strange doctrine to hold the ship bound in a case where the owner made the contract in writing, charging himself to pay by installments for building the vessel at a time when she was neither registered nor licensed as a seagoing ship. So far from the contract's being purely maritime and touching rights and duties appertaining to navigation on the ocean or elsewhere, it was a contract made on land, to be performed on land. The wages of the shipwrights had no reference to a voyage to be performed; they had no interest or concern whatever in the vessel after she was delivered to the party for whom she was built; they were bound to rely on their contract. It was thus held by the first judge Hopkinson, in 1781, who then declared as respects shipbuilders that "the practice of former times doth not justify the admiralty's taking cognizance of their suits." Chilton v. Brig Hannah, Bee's Admiralty App. 419. And we feel warranted in saying that at no time since this has been an independent nation has such a practice been allowed. Turnbull v. Enterprise, Bee's Adm. 345.
It is proper, however, to notice the fact that district courts have recognized the existence of admiralty jurisdiction in rem against a vessel to enforce a carpenter's bill for work and materials furnished in constructing it in cases where a lien had been created by the local law of the state where the vessel was built, such as Read v. Hull of a New Brig, 1 Story 244; and Davis & Lehman v. A New Brig, Gilpin 473; ib., 536; Ludington & King v. Nucleus, 2 Law Jour. 563. Thus far, however, in our judicial history, no case of the kind has been sanctioned by this Court.
For the reasons above stated, it is ordered that the decree below be
Reversed and the libel dismissed for want of jurisdiction.