1 Page 1 1 of 1 DOCUMENT Copyright (c) 2005 Tulane University Tulane Law Review June, Tul. L. Rev LENGTH: words ADMIRALTY LAW INSTITUTE SYPMPOSIUM: THE UNIQUENESS OF ADMIRALTY AND MARITIME LAW: The Uniqueness of Admiralty and Maritime Law: The Unique Nature of Maritime Liens NAME: Raymond P. Hayden* and Kipp C. Leland+ BIO: * Member, Hill, Rivkins & Hayden, LLP. LL.B. 1963, Syracuse University College of Law; B.S. 1960, State University of New York Maritime College. + Hill, Rivkins & Hayden, LLP. J.D., Vanderbilt University; B.S., United States Merchant Marine Academy. LEXISNEXIS SUMMARY:... The law of maritime liens fits nicely into the theme of this seminar, the unique nature of admiralty law, insofar as it is so completely different from lien law existing ashore.... Thus, when one has a maritime lien on cargo for unpaid freight, he may sue the cargo in the same fashion.... Regardless of the maritime character of all of these items and services, however, no lien will attach unless the court is satisfied that they were necessary for the voyage.... Furthermore, to have a maritime lien attach for necessaries, it is required that the goods or services be provided "to a vessel.... Nevertheless, if one does find the need to claim under a state maritime lien, it is enforceable in admiralty in rem against the vessel. One significant example involves vessel construction, which is nonmaritime and thus could not overlap with a federal maritime lien.... The vessel owner receives the remainder of the fund after all maritime and lien claims have been paid.... Significantly, however, a maritime lien is not extinguished by the sale of the vessel, even if purchased in good faith without notice.... In filing a limitation action, the vessel owner deposits with the court a fund equal to the value of the vessel and its pending freight immediately after the casualty as payment for all maritime claims concerning such an event.... HIGHLIGHT: This Article provides an overview of the unique, interesting, and historic world of maritime liens. It covers the history of maritime liens; the fundamental differences between maritime liens and state law liens, maritime lien creation, scope, execution, ranking, collection, and extinguishment; as well as giving general guidance to shipowners, cargo interests, chandlers, suppliers, and others involved in maritime commerce regarding maritime lien issues that arise in their operations. TEXT: [*1228] I. Introduction The law of maritime liens fits nicely into the theme of this seminar, the unique nature of admiralty law, insofar as it is so completely different from lien law existing ashore. To a certain extent, this is due to the different concerns that
2 79 Tul. L. Rev. 1227, *1228 Page 2 accompany a property that moves place to place worldwide and regularly needs assistance in completing its voyages, versus the more stationary and inanimate nature of property liens ashore. However, another reason is, of course, that the United States Constitution vests admiralty jurisdiction in the federal courts, n1 and thus it has had an opportunity to develop independently of land-based state law. Indeed, the law of maritime liens is nearly (but not quite) devoid of state law interference, because despite the "savings to suitors" clause, it is held that only federal courts may discharge maritime liens. n2 Another reason for the difference between maritime and inland liens is that maritime liens are for the most part creations of common law, while security interests ashore are creations of statute. Even the existence of a maritime lien is for the most part determined by common law. There is no statute conclusively establishing which claim is and is not accompanied by a maritime lien. As a result, the law of maritime liens consists mostly of general principles with various exceptions. While bound by precedent, the federal judiciary is free at any time to change the law of maritime liens should it be convinced by a specific case submitted for decision. Moreover, in asserting or defending a maritime lien, the practitioner will likely find himself citing cases decided many decades, if not [*1229] centuries, ago, when vessels were made of wood and propelled by sails. II. Foundation of Maritime Liens It is customary when reciting the law of maritime liens to begin with a brief (and in some cases, extensive) summary of the history of maritime law back to the beginnings of recorded history. Since the theme of this seminar is the unique nature of maritime law, this Article will not overlook this requirement. The primary reason for the historical tour is due to the deeply rooted concept underlying maritime liens in the United States, which holds the vessel to be an entity that can be sued independently of its owner. n3 This "legal fiction," generally described as the "personification of the vessel" because the vessel is characterized as the wrongdoer who is liable for her actions, may strike the uninitiated as an archaic concept, but its survival to the present day attests to its usefulness. Oliver Wendell Holmes has remarked: A ship is the most living of inanimate things.... It is only by supposing the ship to have been treated as if endowed with personality, that the arbitrary seeming peculiarities of the maritime law can be made intelligible, and on that supposition they at once become consistent and logical. n4 In an almost supernatural holding, the United States Supreme Court has pronounced: A ship is born when she is launched, and lives so long as her identity is preserved. Prior to her launching she is a mere congeries of wood and iron - an ordinary piece of personal property - as distinctly a land structure as a house, and subject only to mechanics' liens created by state law and enforceable in the state courts. In the baptism of launching she receives her name, and from the moment her keel touches the water she is transformed, and becomes a subject of admiralty jurisdiction. She acquires a personality of her own; becomes competent to contract, and is individually liable for her obligations, upon which she may sue in the name of her owner, and be sued in her own name. Her owner's agents may not be her agents, and her agents may not be her owner's agents. n5 Oliver Wendell Holmes spends considerable time at the beginning of The Common Law going over laws of antiquity [*1230] concerning the culpability of inanimate objects for what we would now consider to be torts and crimes. n6 In antiquity, when a death was occasioned by an animal or thing, that thing was to escheat to the king "as an accursed thing" or to be surrendered to the victim's family as damages. n7 Such law extends far enough into modernity that even a steam engine has escheated in this very fashion. n8 In any event, Holmes makes his point that the personification of the ship has deep and ancient roots, and that these survive in admiralty to the present day. A frequently quoted passage has none other than Chief Justice John Marshall (then a circuit judge) stating that
3 79 Tul. L. Rev. 1227, *1230 Page 3 this is not a proceeding against the owner; it is a proceeding against the vessel... which is not less an offence, and does not the less subject her to forfeiture, because it was committed without the authority, and against the will of the owner. It is true that inanimate matter can commit no offence.... But this body is animated and put in action by the crew, who are guided by the master. The vessel acts and speaks by the master. She reports herself by the master. It is, therefore, not unreasonable, that the vessel should be affected by this report. n9 While some commentators point out that this case involves a vessel forfeiture to the government and not an admiralty claimant, this even further strengthens the notion that legal culpability for inanimate objects continues to be in effect in the law, as vessel forfeiture laws remain in the United States Code to this day, and Chief Justice Marshall's pronouncement remains the law in this area. State court dockets are full of lawsuits filed by the state against individual motor vehicles and other inanimate objects under the numerous asset forfeiture rules enacted to combat drug trafficking, prostitution, and drunk driving. n10 Perhaps the ancient rules recited by Justice Holmes are not too far removed from the present after all. n11 [*1231] The practical significance of this concept is that a holder of a maritime lien may file suit in federal court against the vessel herself wherever it can be found, have the vessel arrested, and satisfy any eventual judgment from a judicial sale of the vessel. n12 The appearance of a vessel owner in the action is not required, though if the owners would like to defend their interest in the vessel, they may defend it if they so choose. n13 Any judgment issued against the vessel would be inherently limited to the proceeds of the vessel's sale. n14 Courts consider, to varying degrees, the vessel to be an animate object and an individual responsible for her actions and who can be potentially liable for the consequences thereof to the extent that those consequences give rise to maritime liens. n15 Even in certain situations where the owner of the vessel itself cannot be liable (such as in the instance of a collision while the vessel is in the command of a compulsory pilot), the vessel herself can be held liable for her actions. n16 Furthermore, because a vessel (like any defendant) may file a third-party complaint for contribution, one may find himself being sued by a vessel, an inanimate object. n17 To compound the matter, in admiralty cases, the vessel's third-party complaint for indemnification will automatically be deemed made on behalf of the plaintiff. n18 Thus, a plaintiff may find himself suing third parties through no action of his own, due to actions taken by the inanimate object just arrested. n19 The personification of the ship is a unique aspect of U.S. maritime law and is not universal. In much of the world, only in personam suits are allowed, with arrest or seizure of the vessel being in the more conventional category of asset attachment. n20 [*1232] Though mentioned less frequently, cargo may also at times be "personified" under U.S. law. Thus, when one has a maritime lien on cargo for unpaid freight, he may sue the cargo in the same fashion. n21 If nobody appears to defend the cargo, the cargo may be found liable to the extent of its value. Probably the maximum extent of a court's in rem jurisdiction arises in certain vessel charter situations, where such an intangible as the debt of a cargo owner (for unpaid freight) can be sued in rem. n22 While the personification of the vessel is firmly entrenched in U.S. admiralty law, judges are loath to extend the principle to its fullest extent when such a result offends their sense of equity. Justice Holmes thus remarked: No doubt the fiction that a vessel may be a wrongdoer and may be held, although the owners are not personally responsible on principles of agency or otherwise, is carried further here than in England. Possibly the survival of the fiction has been helped by the convenient security that it furnishes, just as no doubt the responsibility of a master for a servant's torts, that he has done his best to prevent, has been helped by the feeling that it was desirable to have some one who was able to pay. But after all a fiction is not a satisfactory ground for taking one man's property to satisfy another man's wrong, and it should not be extended. n23
4 79 Tul. L. Rev. 1227, *1232 Page 4 While claimants unquestionably have the right to sue vessels and cargo in rem in U.S. federal courts, any theory of liability that excessively relies upon the personification of the ship beyond existing precedent and seeks to achieve an end that appears inequitable will probably face an uphill battle. III. Aspects of Maritime Liens The word "lien" may trigger many assumptions to a land-based practitioner that do not hold true in a maritime case. In fact, very few [*1233] of the assumptions commonly made in a land-based lien "hold water" in an admiralty case. Maritime liens, with the exception of cargo, are not possessory; n24 as such, they differ from inland liens such as mechanics' liens. Thus a shipyard's releasing a vessel after work has been done in no way waives its maritime lien; in fact, it allows the vessel to earn freight to pay for the repair. n25 As such, the law of maritime liens acknowledges that a vessel only makes money when it is in motion and is structured so the vessel can do so in the short term without hindrance. Likewise, with certain exceptions such as the preferred ship mortgage, n26 there is no system in place to record the existence of maritime liens, nor any obligation to do so. n27 Considering that vessels visit numerous ports worldwide, maritime liens could be accruing nearly anywhere on the planet, and there is no way for anyone other than the owner or charterers to have a good idea how many exist at any time. It is for this reason that it is sometimes referred to as a "secret" lien. n28 Thus when a ship chandler provides supplies to a vessel, he has no way of knowing how many other liens exist to dilute or extinguish his security. To compound the uncertainty, liens continue in full force against the vessel even after it is sold, even when the sale was made to a good faith buyer without notice. n29 While the owner may have changed, the vessel as its own entity continues in existence and remains responsible for the claims and debts against it. n30 Probably the most striking to the nonadmiralty practitioner is that maritime liens are ranked "last in time, first in right." n31 As such, subsequent liens outrank prior ones, and (subject to certain exceptions to be explained later in this Article) the first liens get paid last, if at all. n32 While this may seem insane to the uninitiated, there is method in it. Specifically, it allows the vessel to continue on its way and earn freight without hindrance, because suppliers are continually assured of their liens' priority over previous ones and, on that basis, can feel more comfortable extending the vessel [*1234] credit. However, one must be mindful that a maritime lien gets less and less secure the longer one waits, and, therefore, one waits too long to assert his lien at his own peril. Another reason why waiting imperils the security is that a maritime lien can be extinguished by operation of laches. n33 It does not last forever. Finally, all liens are extinguished by a judicial sale of the vessel. n34 Thus a ship chandler could sue and execute upon a vessel in Europe and discharge all liens without other lienors having received any notice whatever. n35 Indeed, it is the capability of a vessel to travel the world and subject itself to the jurisdiction of innumerable countries that makes the law of admiralty so flavorful, and maritime liens are no exception. While a maritime lien unquestionably attaches to the vessel itself, an issue is sometimes raised as to whether the lien also attaches to specific items aboard the vessel. Thus this is one area in which maritime lien law is somewhat congruent with state law, as it is roughly analogous to the property law notion of a fixture. n36 Thus it is generally the rule that "equipment installed aboard a vessel, which becomes an integral part of the vessel and [is] essential to its navigation and operation, [is] subject to the maritime liens upon [a] vessel, regardless of who the actual owner may be." n37 If equipment is physically attached to the vessel, there is a greater chance that it is covered in the lien, though in a close case the court's judgment could go either way. n38 As a general proposition, everything else aboard that is necessary to the voyage of the vessel is included. n39 Thus one should take advice before placing property aboard a vessel, lest it be sold by [*1235] an admiralty court halfway around the world to satisfy the vessel's debts. n40 IV. Creation of Maritime Liens Maritime liens are established only by federal law. n41 Because they are common law creations, the best that can be said is that any claim within the federal admiralty jurisdiction gives rise to a maritime lien unless a published decision indicates to the contrary. Even in that instance, an admiralty court may be convinced to reverse precedent and grant a lien given appropriate facts. n42 Thus liens accompany most maritime disputes with some exceptions.
5 79 Tul. L. Rev. 1227, *1235 Page 5 A. Maritime Torts Maritime liens attach to nearly all maritime torts, n43 including vessel collisions and allisions n44 and also statutory maritime torts such as claims under the Death on the High Seas Act; n45 however no lien attaches for Jones Act personal injury actions. n46 B. Wages Maritime liens also secure the payment of a vessel's crew wages. n47 However, such a lien does not extend to contributions made to the crew pension plan. n48 While the master of a U.S. vessel also has a lien for his wages, n49 some other countries do not grant such a lien, and thus a [*1236] master of a foreign vessel would have a lien only if such would be granted under the law of the flag state. n50 C. Charters Maritime liens attach for breach of a vessel charter. n51 This includes an owner's lien upon the cargo owned by the charterer for unpaid freight n52 and a lien upon the vessel by the charterer for unearned freight held by the owner, n53 or for other contractual breaches of the charter contract. n54 Charters generally provide for this contractually as well by including the terms: That the Owners shall have a lien upon all cargoes, and all subfreights for any amounts due under this charter, including General Average contributions, and the Charterers to have a lien on the Ship for all moneys paid in advance and not earned and any overpaid hire or excess deposit to be returned at once. n55 In situations where the cargo aboard is not owned by the charterer, then the owner would only have a lien to the extent that the freight for the cargo is owing. n56 However, even if cargo is delivered, courts allow an owner to recover unpaid freight by filing an in rem action against the debt itself, reasoning that, "by the general logic of the law a debt may be treated as a res as easily as a ship. It is true that [*1237] it is not tangible, but it is a right of the creditor's, capable of being attached and appropriated by the law to the creditor's duties." n57 D. Cargo As has been previously stated, maritime liens can also attach to cargo, including unpaid freight and demurrage, n58 and general average. n59 While courts sometimes discuss the potential of an in rem action by a vessel against cargo for theoretical fault of the cargo in causing damage, n60 as a practical matter the cargo in question is usually destroyed in the process and thus is not subject to an action in rem. n61 Unlike liens against vessels, the cargo lien is possessory, and the carrier's unconditional delivery of the cargo to the consignee discharges any maritime cargo lien that could have otherwise been asserted. n62 E. General Average While a lien for unpaid freight is very similar to equivalent warehouseman's and carrier's liens, it is doubtful that any land-based analogue exists for the maritime general average lien. To understand the origin of this concept, one would best put oneself in the shoes of a captain in antiquity, in the middle of a savage storm on a fully loaded ship being tossed about furiously by wrathful gods of the deep. Staring death in the face, you order the crew to throw whatever cargo they can handle over the side to lighten the ship so that it may emerge from the storm intact and afloat. The vessel and whatever cargo that was left only made it out of the storm and to the safety of port because [*1238] the other cargo was sacrificed, and thus it seems equitable for the owners of the lost cargo to be recompensed for their loss by the others so that the total loss can be shared. This is the genesis of general average, which has been granted by the courts of
6 79 Tul. L. Rev. 1227, *1238 Page 6 antiquity and continues to this very day in admiralty. n63 Naturally one will likely not find today instances where sailors throw forty-foot containers over the side, but generally when the voyage is threatened and expenses or sacrifices need to be made, a lien will attach for a pro rata share of the expenses or sacrifices made. n64 These generally involve expenses paid by the vessel for repairs needed to complete a voyage, expenses for ports of refuge, and salvage costs. n65 F. Salvage Claims for salvage also give rise to maritime liens, n66 which is only fair because in many cases the ship would not exist if not for the salvor's efforts. Because in many instances a salvor's award is itself determined as a percentage of the value of the vessel and cargo salved, the award (and thus the lien) itself may be a percentage. n67 Note that salvage liens attach to both vessels and cargo, so cargo owners may find their items sold by a successful salvor if they do not secure the salvor's award, regardless of whatever nonsalvage liens may have attached. n68 G. Marine Pollution Maritime liens also arise concerning pollution damage caused by the vessel, both under maritime common law n69 and by statute in many [*1239] cases. n70 State statutes also provide for liens upon vessels causing pollution to secure cleanup costs. n71 H. Necessaries Finally, federal statute provides that maritime liens attach when "necessaries" are provided to a vessel. n72 "Necessaries" are defined by the statute to include "repairs, supplies, towage, and the use of a dry dock or marine railway." n73 The courts have given a wide interpretation to this language to hold that "necessaries" include just about any goods or services that are "useful to the vessel, keep her out of danger, and enable her to perform her particular function." n74 Examples are nearly infinite, but generally fall into several categories, including those items and services needed for a vessel to come ashore and transfer cargo (pilotage, n75 wharfage and dockage, n76 stevedoring, n77 and items to assist in cargo loading n78 ); for vessel maintenance, outfitting, and consumables (purchase of engines, n79 bunkers, n80 fishfinding radar, n81 and positioning [*1240] systems n82 ); services (fumigation n83 ); and for vessel provisions (including cigarettes n84 and liquor n85 ). Regardless of the maritime character of all of these items and services, however, no lien will attach unless the court is satisfied that they were necessary for the voyage. Determination as to whether a good or service is a "necessary" is very fact-intensive, and thus what a court will decide in a particular case is not always clear. n86 Generally, a good or service is considered a "necessary" if it is needed by the ship, and thus the court will have to make a judgment as to whether any particular item or service was reasonably required to conduct the voyage or not. n87 For example, "necessaries" do not include the provision of spare items beyond those necessary for the voyage. n88 Furthermore, to have a maritime lien attach for necessaries, it is required that the goods or services be provided "to a vessel." n89 Shipment to the vessel owner or another location remote from the vessel may not be sufficient, especially if the items shipped are not designated for use on a specific vessel, but are provided to the owner for the use of no vessel in particular. n90 In such cases, no maritime lien attaches. n91 It is thus advisable to deliver the items to the pier and put the particular vessel name on the invoice. At one time, a vessel under charter could prevent the establishment of liens for necessaries by placing terms in the charter party that deny the charterer the authority [*1241] to bind the vessel with a lien. n92 However, sensing the injustice in requiring a vendor to inquire into the terms of a charter party (which may or may not be aboard in any event) or suffer loss of security, legislation states that "the owner, master, or a manager at the port of supply; and an officer or agent appointed by the owner, charterer, owner pro hac vice, or buyer in possession of the vessel" is presumed to have authority to procure necessaries for the vessel and thus to allow a lien to be placed on the vessel. n93 Case law has held that a person "entrusted with the management of the vessel" includes a charterer, n94 chief engineer, n95 and purchaser in possession, n96 but does not include a watchman, n97 mortgagee in possession, n98 or attorney. n99 Regardless of the statute, however, if actual authority exists to procure necessaries for the vessel, then the lien would attach. n100
7 79 Tul. L. Rev. 1227, *1241 Page 7 I. Mixed Claims and Executory Contracts If a claim contains both lien and nonlien components, the court will separate it to keep the lien-secured claims separate from the nonlien claims. n101 Furthermore, no maritime lien will arise for an executory contract; the contract must have been performed to get a maritime lien. n102 The dividing line is generally when items or services come in contact with the vessel; hence the lien will not attach until necessaries are actually furnished to the vessel or the owner for [*1242] placement aboard the vessel, n103 the cargo is actually provided to the vessel, n104 the vessel being chartered is placed at the charterer's disposal, n105 or the passenger actually boards the vessel. n106 J. Credit of the Vessel If one intends to bind the vessel with a lien, he should not do anything that would tend to indicate that he is relying upon the faith and credit of the owner, or some other form of security aside from the vessel, without making it clear that he is also retaining the maritime lien on the vessel. Failure to make it clear that the vessel lien is being relied upon may result in a court concluding that the vessel lien has been waived. n107 To the extent that the lien is for "necessaries," this requirement is somewhat relaxed, as federal statute establishes a presumption that the credit of the vessel is relied upon, n108 and the burden is upon the vessel to show a "necessaries" lien was waived with "clear and affirmative proof." n109 However, lienholders may subsequently waive or agree to subordinate their lien, n110 so care should be taken lest loose language in subsequent negotiations or agreements causes one's security in the vessel to be lost. [*1243] K. In Custodia Legis Surprisingly, no lien can attach to the vessel during the time it is in the possession of a federal court exercising in rem jurisdiction. n111 This includes all types of liens that would otherwise accrue - from crew wages to wharfage to necessaries. n112 Thus, absent a court order allowing such expenses, one should be cautious of extending any credit to a vessel under arrest. n113 V. Ranking of Maritime Liens The ranking of maritime liens can be analogized to modern bankruptcy law insofar as it determines whose claims and how much will be paid when there are insufficient assets to pay all claimholders. Put simply, when there is not enough money to pay all claimants, payment is made from highest ranked to lowest ranked until the money is expended. However, the similarity with bankruptcy law ends there. The rules governing ranking of maritime liens were originally entirely created by the common law of the federal courts. n114 Later legislation has modified, but not replaced, common law ranking jurisprudence. n115 As such, a convincing argument can persuade courts to modify the status of various classes of claims to achieve equity. To compound the uncertainty, the priority of specific claims may differ based on which federal district court is exerting jurisdiction over the vessel. Probably the most surprising aspect of maritime lien ranking is that liens which are "nonmaritime" rank last. n116 This includes liens arising under the Uniform Commercial Code, vessel mortgages that do not fulfill the qualifications of a Preferred Ship Mortgage under the Ship Mortgage Act, and even federal tax liens. n117 As surprising as it may seem, the Internal Revenue Service (IRS), being nonmaritime, [*1244] ranks below maritime lienholders when it asserts claims before the admiralty courts of the United States. n118 By common law, maritime liens are classed and paid in the following order of priority until the proceeds of the sale are expended. A. In Custodia Legis
8 79 Tul. L. Rev. 1227, *1244 Page 8 Claims arising after the vessel's arrest while it is under the custody of the court in fact do not give rise to a maritime lien, n119 and for that reason, one should be careful before providing goods and services to a vessel under arrest. However, a court will allow such claims and give them priority over all other claims if it decides that "in equity and good conscience" those claims should be paid. n120 As such, payment of these claims is entirely up to the discretion of the court. Generally a court will not pay these claims when the services rendered are not required for the vessel. n121 B. Seamen's Wages Admiralty courts frequently voice their obligation to look out for seamen, and thus it is no surprise that seamen's wage claims rank high. n122 Indeed, the Supreme Court has said that "as long as a plank of the ship remains, the sailor is entitled, against all other persons, to the proceeds as a security for his wages." n123 However, seamen's wage claims may be outranked by collision claims should their vessel be the "guilty vessel." n124 [*1245] C. Salvage and General Average Liens It is only natural that a salvor's lien is highly ranked, as the salvage of a ship benefits all claimholders. Courts sometimes pay salvage liens before seamen's wage liens because "it is owing to their exertions that anything remains to which the lien of the seamen can attach." n125 General average liens are similarly ranked, because they are held to be in the nature of salvage. n126 D. Maritime Tort Claims Next in rank comes maritime tort claims. n127 This includes all types, such as collision claims, claims for personal injury, and "other wrong, done upon the high seas." n128 E. Contract Claims Below tort claims come contract claims. n129 These claims include charter party liens, n130 liens for necessaries, n131 and claims arising from cargo damage covered by a bill of lading or other contract of carriage. n132 However, courts can and have cast cargo damage claims as torts, n133 thus allowing them to outrank contract claims, even though they are also contractual in nature, and thus, hybrid lien claims. n134 Similarly, claims for negligent towage have been allowed to rank as tort despite the presence of a contract between the parties. n135 [*1246] F. State-Law-Created Maritime Liens In response to the now-rejected "home port" doctrine, various states enacted statutes providing for maritime liens under state law. Following the rejection of the "home port" doctrine by enacting the Maritime Lien Act of 1920, those state laws are still on the books. n136 The Federal Maritime Lien Act recognizes their existence, but provides that they are "superseded... to the extent the statute establishes a claim to be enforced by a civil action in rem against the vessel for necessaries." n137 As a practical matter, a state-created maritime lien probably falls within one of the federal categories, and thus those claims are preferably asserted under the federal statute to get higher ranking. n138 Nevertheless, if one does find the need to claim under a state maritime lien, it is enforceable in admiralty in rem against the vessel. n139 One significant example involves vessel construction, which is nonmaritime n140 and thus could not overlap with a federal maritime lien. n141 G. Government Tax Claims
9 79 Tul. L. Rev. 1227, *1246 Page 9 No statute specifically grants tax claims a priority above maritime liens; as such, the latest precedent on this topic holds that tax claims are subordinate to maritime liens in an admiralty court. n142 [*1247] Subsequent to this holding, Congress has not seen fit to enact legislation to the contrary. About the only benefit that the federal government has been able to extract from judges sitting in admiralty courts is receipt of federal withholding payments when seamen are awarded their wages under their lien (thus allowing the federal government to stand in the shoes of a seaman). n143 H. Nonmaritime Liens This would include vessel mortgages that do not fulfill the qualifications of a Preferred Ship Mortgage, security interests created by Uniform Commercial Code (U.C.C.) filings, and other state-created liens on the vessel. n144 I. Nonlien Maritime Claims Finally, maritime claims that are not secured by liens are to be paid. n145 To fit into this category, the claim must be maritime in nature and would have ordinarily created a lien, if not for some other reason. n146 J. Nonmaritime Claims The vessel owner receives the remainder of the fund after all maritime and lien claims have been paid. n147 If one's claim is not secured by a lien and is not maritime, then one may not intervene in an in rem proceeding and may not receive any excess funds that may [*1248] exist. n148 Such a claimant is thus limited to filing an action against the owner in state court. If it is not already apparent, the ranking of claims is subject to the intricacies and inherently flexible nature of common law, and district court judges have great flexibility in adjusting the rank of various claims where they see fit. Additionally, the common law ranking structure has been adjusted by the Ship Mortgage Act of K. The Ship Mortgage Act of 1920 The Ship Mortgage Act of 1920 operates to change the common law ranking of claims. n149 The genesis of this Act was the federal government's need to dispose of a great deal of government-owned merchant ships following the conclusion of World War I. n150 Prior to enactment, admiralty courts had held vessel mortgages to be nonmaritime and thus outside the federal admiralty jurisdiction, with the result that vessel mortgages ranked behind all other maritime liens. n151 Under admiralty law, the only encumbrance that could be put on the ship for financing was a bottomry bond; however this bond was unsatisfactory, as it required the debt to be discharged should the vessel be lost. n152 Thus, Congress enacted the Ship Mortgage Act of 1920, which provided that once certain filing and documenting provisions are satisfied, a "preferred ship mortgage" is created. n153 A preferred ship mortgage has priority over all other liens except for "preferred maritime liens," which are defined by the statute to be: a. Maritime liens arising prior to the filing of the preferred ship mortgage; b. Liens arising out of a maritime tort; c. Liens for wages of a stevedore; n154 d. Liens for wages of the vessel crew; e. General average liens; and [*1249] f. Salvage liens. n155 As such, the Act alters the common law ranking to allow a preferred vessel mortgage to outrank nearly all other
10 79 Tul. L. Rev. 1227, *1249 Page 10 maritime liens except for those liens that reach "preferred" status under the statute. n156 As initially drafted, the Ship Mortgage Act did not provide a way for foreign vessel mortgages to achieve preferred status. The result was that because mortgages other than preferred ship mortgages were nonmaritime, foreign vessel mortgages obtained no benefit from the statute and remained nonmaritime. n157 Subsequent legislation addressed this issue by allowing recognition of foreign vessel mortgages as preferred ship mortgages; however, the foreign vessel mortgage would remain subordinate to liens for necessaries provided to the vessel by U.S. claimants. n158 While the effect of this addition is relatively straightforward, courts have also held that the wage claims of foreign vessel masters are also subordinate to a foreign vessel mortgage achieving preferred status. n159 L. Priority Within Rank With regard to similarly ranked liens, recovery from the vessel sale proceeds is distributed to claims on a "last in time, first in right" basis, determined by the date that the lien arose, until all claims in the rank are paid, or the proceeds are exhausted. n160 Thus if a lienholder waits too long to enforce his lien, it may be diluted entirely. The reason for such a rule is said to be: First, that each person acquires a jus in re, and becomes a sort of coproprietor in the res, and therefore subjects his claim to the next similar lien which attaches; and, second, that the last beneficial service is the one that continues the activity of the ship as long as possible, and [*1250] therefore should be preferred, provided that what is produced or contributed to by the service is a voyage. Under the second theory, there is the consideration that beneficial additions subsequent to earlier liens add to the value of the ship, and that, therefore, to prefer such additions will not deprive the earlier lienors of any interest which they would have had, if no such services had been rendered. n161 Indeed, without fuel, maintenance, supplies, and provisions, a vessel will go nowhere and earn no freight, all to the detriment of the owner and ultimately to lienholders who are hoping to be paid out of the proceeds of the voyage. If a vessel is not able to give a high-ranking lien to a supplier, at a certain point the vessel would not be able to get sufficient credit to continue its voyage. However justified, maritime lienholders abstain from enforcement of their liens at their peril. With regard to tort liens, the "last in time, first in right" rule is easy to administer, for example, subsequent casualties outrank prior ones. n162 However, necessaries liens and wages liens pose a more difficult problem, especially when goods and services are being furnished simultaneously and repeatedly. As a practical measure, courts have seen fit to establish time windows within which all similarly ranked liens share pro rata with prior windows being outranked by subsequent ones. However, each district court has been left to craft its own window, and thus there is less uniformity. The duration of these windows is based in part on local conditions and in part upon each respective court's notions of equity and thus varies widely. n163 The Supreme Court has never seen fit to replace the district courts' holdings with a nationally unified standard. Some courts separate lien claims by voyage, with all claims of the same rank arising in the last voyage sharing pro rata. n164 In the Great Lakes area, which is iced over during the winter, federal district courts have established the "season rule," wherein claims from prior seasons are paid only after [*1251] claims for last season are paid. n165 Some courts use the calendar year as the window. n166 Others use a "12 month rule," which dates back from the filing of the complaint. n167 The United States District Court for the Western District of Washington has a ninety-day window. n168 New York Harbor (including the United States District Courts for the Southern and Eastern Districts of New York and the District of New Jersey) has a forty-day window, and all claims that fall outside of that window share alike. n169 While small local craft can probably be assumed to stay within one district court's jurisdiction, larger craft may sail through multiple jurisdictions, and as such, it may be impossible to forecast which preference period will apply prior to a vessel's arrest. Naturally, the options for forum shopping for an advantageous window may be considered.
11 79 Tul. L. Rev. 1227, *1251 Page 11 VI. Extinguishment of Maritime Liens Naturally, a maritime lien is extinguished upon payment for the underlying debt. Likewise, a maritime lien can be extinguished by operation of laches, n170 or by any limitation period applying to the [*1252] underlying dispute. n171 Significantly, however, a maritime lien is not extinguished by the sale of the vessel, even if purchased in good faith without notice. n172 As maritime liens are for the most part unrecorded, n173 there is no obvious way to determine the existence of these liens. This applies to all vessels, from supertankers to pleasure craft, because there is no minimum-size requirement for a maritime lien. The only way to purchase a vessel that is guaranteed to be free and clear of all maritime liens is through a federal vessel foreclosure under a district court of the United States exercising its in rem jurisdiction over the vessel in question. n174 State courts do not have the power to extinguish maritime liens. n175 While under the "saving to suitors" clause relief in a specific maritime lien could theoretically be had through a state court, any sale of the vessel under state law would not extinguish the remaining maritime liens on the vessel for the purchaser. n176 As such, the holder of a federal maritime lien would be best advised to sue in federal court where he can get a higher ranking and an opportunity to sell the vessel free and clear of all liens (thus increasing the marketability of the vessel). On the flip side, once a vessel is sold in foreclosure by a federal district court, all liens are expired, whether or not any specific lienholder received notice of the proceeding. n177 Lienholders not keeping track of vessels thus risk losing their security entirely should a foreclosure happen without their knowledge. Should a vessel be arrested and a letter or guarantee or a bond not be posted to release the vessel, lienholders have no choice but to intervene in the action and assert their claims, or risk their security being extinguished. [*1253] VII. Limitation of Shipowners' Liability Act of 1851 A vessel's liability in rem is by its very nature limited to its value, while the vessel owner's liability is not so limited in the regular course of events. However, a vessel owner may obtain the same limit as his vessel by filing an action in a federal district court under the Limitation of Shipowners' Liability Act of 1851 (Limitation Act). n178 As if maritime liens were not complicated and confusing enough, the filing of an action under this Act serves to complicate matters further. Generally, a limitation action is filed subsequent to a major loss that threatens the owner with liability beyond the worth of the vessel, such as a collision, sinking, or similar incident. n179 In filing a limitation action, the vessel owner deposits with the court a fund equal to the value of the vessel and its pending freight immediately after the casualty as payment for all maritime claims concerning such an event. n180 If filed within six months of notice of the event causing liability, a court will order an injunction requiring all persons or entities with claims against the owner (and vessel) to cease any actions they may have filed elsewhere and file a claim with the court where the limitation action was filed. n181 A limitation action will discharge almost any debt beyond the deposited value, both in personam against the owner and in rem against the vessel. n182 However, it is unclear which debts are subject to the proceeding (and thus limited to the limitation fund) and which debts are not. The Act itself covers "embezzlement, loss, or destruction by any person of any property, goods, or merchandise shipped or put on board of such vessel, or for any loss, damage, or injury by collision, or for any act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred." n183 Furthermore, 189 of the statute limits "all debts and liabilities" of the shipowner. n184 It is safe to say that claims associated with vessel [*1254] casualties are subject to the proceeding, including collision claims, n185 personal injury and death claims, n186 and cargo loss claims. n187 However, if the vessel committed a deviation, the owner may not limit under the statute, and thus a claimant's maritime lien for damages would survive the petition. n188 In the same fashion, wages for the ship's crew are not limited by the Act, and thus the accompanying lien would survive the limitation action. n189 Maintenance and cure recoveries are not subject to limitation actions either. n190 A refund of unearned freight would not be within the limitation action. n191 While there is also an exception for personal contracts of the shipowner, n192 such claims would not give rise to a maritime lien because they, by definition, involve credit extended by the owner and not the ship. n193 Finally, claims by the federal government under the Wreck Act n194 and
12 79 Tul. L. Rev. 1227, *1254 Page 12 state and federal claims for pollution damage are not subject to limitation. n195 However, just because a type of claim would be subject to the Limitation Act does not necessarily mean that it is subject to any particular limitation proceeding. Because a limitation proceeding is typically filed in response to a particular vessel casualty, maritime liens unconnected with that casualty, arising both before and after the casualty, may or may not become a part of the limitation proceeding and thus may or may not be limited. The trial judge has the discretion to determine whether they are included. n196 Because upon the filing of a [*1255] limitation action the court issues an injunction ordering all claimholders to file their claims with the court, failing which they will be barred, maritime lienholders are best advised to file a claim in any limitation proceeding even if their lien is unrelated to the casualty occasioning the filing. Failure to do so risks foregoing an opportunity to oppose an unfavorable ruling on this issue and complete loss of their claim and lien. If the claims exceed the limitation fund, then the familiar issue of ranking of claims comes to the foreground again. Supplemental Rule F of the Federal Rules of Civil Procedure provides that the claims against the fund are paid "pro rata, subject to all relevant provisions of law, among the several claimants in proportion to the amounts of their respective claims, duly proved, saving, however, to all parties any priority to which they may be legally entitled." n197 While the above would seem to preserve the relative ranking structure that already exists with regard to a judicial sale of the vessel in rem, such is not always the case. The limitation statute provides that a fund insufficient to pay all claims be distributed "in proportion to their respective losses." n198 Thus, a court may distribute the fund pro rata to both lien and nonlien claims. n199 Under the court's equitable powers, it may order that innocent personal injury and cargo claimants be paid in full before a negligent vessel owner claimant. n200 Thus, lien priorities may very well be displaced should a vessel owner file for limitation. VIII. International Considerations In the same fashion as the Limitation Act, the United States has not signed any international convention concerning the establishment, enforcement, and extinguishment of maritime liens. As such, U.S. law stands on its own and is not designed to mesh with the lien and limitation proceedings occurring in other nations. Nevertheless, principles of comity provide for some harmony in international proceedings. It appears settled in the international community that a [*1256] U.S. court's judicial sale of a vessel will discharge all liens upon that vessel worldwide. n201 Likewise, U.S. courts recognize that a judicial sale of a vessel arrested by a foreign court will serve to discharge all liens upon that vessel and bars a subsequent in rem action against that vessel in U.S. courts on liens existing prior to the sale. n202 U.S. courts will respect choice of law clauses in contracts when maritime liens are involved. n203 Thus, if a contract (which would under U.S. law create a lien) chooses the law of a nation that does not recognize a maritime lien for that transaction, no maritime lien will arise. n204 As many nations in the world do not even provide for an in rem remedy, this can serve to extinguish maritime liens outright. One notable instance involves claims for cargo damage on voyages from or to the United States, where a binding forum selection clause directing disputes to Korea serves to completely deprive cargo interests of an in rem remedy, as the courts of Korea provide for no such thing. n205 While arguably contrary to the holding in M/V Sky Reefer n206 as reducing the protections granted by U.S. statute, courts have nevertheless enforced such clauses. n207 When the contract does not have a choice of law clause, or no contract exists between the parties, U.S. courts have extended the analysis set forth in Lauritzen v. Larsen n208 to determine which country's substantive law applies. n209 Naturally, U.S. procedure governs throughout a U.S. proceeding. What that means, of course, is that the uncertainty inherent in determining what country the court will decide under the Lauritzen factors analysis should be taken into account by the maritime practitioner when the creation and/or enforcement of a maritime lien is contemplated. [*1257]
13 Page 13 IX. Conclusion The unique character of maritime liens has surprised nonadmiralty practitioners in the past and will continue to do so. Whether one sees the differences as being necessary given the unique nature of an oceangoing vessel or as a quaint anachronism existing by virtue of inertia, an erroneous assumption that vessel liens are similar to land-based liens can have serious consequences. Likewise, given the increase in global transportation of goods even land-based concerns should be aware of the maritime liens that can attach to their inventory in transit, which can trump security arrangements made under the Uniform Commercial Code. It surely must shock IRS recovery agents to learn that their tax lien is outranked by a vessel chandler's unpaid bill for liquor and cigarettes. Legal Topics: For related research and practice materials, see the following legal topics: Admiralty LawCharterpartiesCharter ContractsRemediesMaritime LiensAdmiralty LawMaritime LiensDischargeAdmiralty LawMaritime LiensNatureJurisdiction FOOTNOTES: n1. U.S. Const. art. III, 2, cl. 1. n2. Thomas J. Schoenbaum, Admiralty and Maritime Law 1-2, at 6-8 (3d ed. 2001). n3. Id. 7-1, at n4. Oliver Wendell Holmes, The Common Law 25 (Little Brown & Co. 1963) (1881). n5. Tucker v. Alexandroff, 183 U.S. 424, 438 (1902). n6. See Holmes, supra note 4, at 8-28.
14 Page 14 n7. Id. n8. Id. at 24. n9. United States v. The Little Charles, 26 F. Cas. 979, 982 (C.C. Va. 1818) (No. 15,612), cited with approval in United States v. The Cargo of the Brig Malek Adhel, 43 U.S. 210, 234 (1844). n10. See Bennis v. Michigan, 516 U.S. 442, 446 (1996) (involving the forfeiture of a vehicle used by a husband to solicit prostitutes despite innocent wife co-owner's noninvolvement); see also People v. One 1951 Ford V-8 Custom Club Coupe, 259 P.2d 693, 693 (Cal. Ct. App. 1953) (involving the forfeiture of a vehicle driven by a drug trafficker despite owner's noninvolvement). But see Oklahoma v Chevrolet Pickup, 852 P.2d 786, 788 (Okla. Ct. App. 1993) (ruling that a vehicle was not forfeited due to owner's noninvolvement in son's drunk driving). See generally Don F. Vaccaro, Annotation, Relief to Owner of Motor Vehicle Subject to State Forfeiture for Use in Violation of Narcotics Laws, 50 A.L.R. 3d 172 (1973); Brian L. Porto, Annotation, Validity, Construction and Application of Statute Permitting Forfeiture of Motor Vehicle for Operation of Vehicle While Intoxicated, 89 A.L.R. 5th 539 (2001). n11. See, e.g., Sierra Club v. Morton, 405 U.S. 727, (1972) (Douglas, J., dissenting). Justice Douglas's dissenting opinion suggested that Mineral King Valley, a plot of land in California, might have standing to sue in its own name to prevent development upon itself, citing admiralty precedent. Id. (Douglas, J., dissenting). See generally Christopher D. Stone, Should Trees Have Standing? - Toward Legal Rights for Natural Objects, 45 S. Cal. L. Rev. 450 (1972). n12. Schoenbaum, supra note 2, 1-2, at 8. n13. See id. 1-2, at 8-9. n14. See id. 1-2, at 8. n15. See The Little Charles, 26 F. Cas. 979, 982 (C.C. Va. 1818) (No. 15,612).
15 Page 15 n16. See id. n17. Fed. R. Civ. P. 7(a). n18. Id. 14(c). n19. Id. n20. See Griffith Price, The Law of Maritime Liens (1940). n21. In re 4885 Bags of Linseed, 66 U.S. 108, 108 (1861) ("The libel in this case was filed [by] owners of the ship Bold Hunter, against four thousand eight hundred and eighty-five bags of linseed, seven thousand pockets of linseed, and fifteen hundred and thirty bags of pegue cutch."). n22. See United States v. The Freights of The Mount Shasta, 274 U.S. 466, , 1927 AMC 943, (1927) (recognizing that a valid lien upon subfreights allows for a remedy in rem); Gray v. The Freights of The Kate, 63 F. 707, 708 (S.D.N.Y. 1894) (involving claims to recover against the freights of a vessel). n23. The Eugene F. Moran v. N.Y. Cent. & Hudson River R.R. Co., 212 U.S. 466, 474 (1909) (citations omitted). n24. Walsh v. Placedo Shipping Corp. of Liber., 789 F.2d 1406, 1407, 1986 AMC 2308, 2310 (9th Cir. 1986).
16 Page 16 n25. See Price, supra note 20, at 139. n26. See infra Part V.K. n27. See Walsh, 789 F.2d at 1407, 1986 AMC at n28. Cornish Shipping Ltd. v. Int'l Nederlanden Bank N.V., 53 F.3d 499, 506, 1995 AMC 2582, (2d Cir. 1995). n29. Bermuda Express, N.V. v. M/V Litsa, 872 F.2d 554, , 1989 AMC 1537, (3d Cir. 1989). n30. See Schoenbaum, supra note 2, 7-7, at 467. n31. The St. Jago de Cuba, 22 U.S. (9 Wheat.) 409, 416 (1824). n32. See id. n33. The Key City, 81 U.S. (14 Wall.) 653, 660 (1872). n34. The Mary, 13 U.S. (9 Cranch) 126, (1815).
17 Page 17 n35. See id. at n36. See William E. Burby, Real Property (3d ed. 1965). n37. United States v. F/V Sylvester F. Whalen, 217 F. Supp. 916, 917, 1963 AMC 2389, 2390 (D. Me. 1963). n38. See Turner v. United States, 27 F.2d 134, 136, 1928 AMC 1089, 1098 (2d Cir. 1928) (holding that items necessary for navigation are subject to a lien); S.W. Wash. Prod. Credit Ass'n v. O/S New San Joseph, 1977 AMC 1123, 1126 (N.D. Cal. 1977) (same); First Suffolk Nat'l Bank v. The Air Brant, 125 F. Supp. 709, 710, 1955 AMC 2130, (E.D.N.Y. 1954) (same); The Katherine, 15 F.2d 387, 388, 1926 AMC 878, 880 (E.D. La. 1926) (same); The Augusta, 15 F.2d 727, (E.D. La. 1920) (same); The Hope, 191 F. 243, 247 (D. Mass. 1911). But see Kawasaki Heavy Indus. v. M/V Sorrento, 1982 AMC 2990, (E.D. Va. 1982); W.R. Grace & Co. v. Charleston Lighterage & Transfer Co., 95 F. Supp. 249, 250 (E.D.S.C. 1951); Nat'l Bank of Commerce v. Oil Screw John T., 1949 AMC 328, (W.D. Wash. 1947); The Hirondelle, 21 F. Supp. 223, 226, 1937 AMC 1597, 1602 (S.D. Ala. 1937); The Showboat, 47 F.2d 286, 287, 1931 AMC 19, (D. Mass. 1930); The Frolic, 148 F. 921, (D.R.I. 1906). n39. See Price, supra note 20, at 1-5. n40. A U.C.C. filing under state law gives practically no protection in admiralty. See sources cited infra note 137. n41. See Schoenbaum, supra note 2, 7-1, at n42. Exxon Corp. v. Cent. Gulf Lines, Inc., 500 U.S. 603, 613, 1991 AMC 1817, 1824 (1991) (holding for the first time that delivery of fuel under an agency contract is within the court's admiralty jurisdiction), remanded to 780 F. Supp. 191, 196, 1992 AMC 1663, (S.D.N.Y. 1991) (holding on remand that a maritime lien attaches upon delivery of fuel under an agency contract).
18 Page 18 n43. See The Anaces, 93 F. 240, (4th Cir. 1899). n44. Hunley v. ACE Mar. Corp., 927 F.2d 493, , 1991 AMC 1217, (9th Cir. 1991). n U.S.C. app. 761 (2000). n46. Plamals v. S.S. Pinar Del Rio, 277 U.S. 151, (1928). n47. The John G. Stevens, 170 U.S. 113, 119 (1898); Taylor v. Carryl, 61 U.S. (20 How.) 583, (1858). n48. Long Island Tankers Corp. v. S.S. Kaimana, 265 F. Supp. 723, 729 (N.D. Cal. 1967), aff'd sub nom. Cross v. S.S. Kaimana, 401 F.2d 182 (9th Cir. 1968) (per curiam). n U.S.C. 606 (2000). n50. See Payne v. SS Tropic Breeze, 423 F.2d 236, 243, 1970 AMC 1850, (1st Cir. 1970). n51. Int'l Marine Towing, Inc. v. S. Leasing Partners, Ltd., 722 F.2d 126, , 1985 AMC 1908, (5th Cir. 1983); Schilling v. A/S D/S Dannebrog, 320 F.2d 628, (2d Cir. 1963); Kopac Int'l Co. v. M/V Bold Venture, 638 F. Supp. 87, 89-90, 1987 AMC 182, (W.D. Wash. 1986); Rainbow Line, Inc. v. M/V Tequila, 341 F. Supp. 459, , 1972 AMC 1540, 1545 (S.D.N.Y. 1972), aff'd, 480 F.2d 1024, 1973 AMC 1431 (2d Cir. 1973). n52. Cornish Shipping Ltd. v. Int'l Nederlanden Bank N.V., 53 F.3d 499, , 1995 AMC 2582, (2d Cir. 1995); The Albert F. Paul, 1 F.2d 16, (2d Cir. 1924); Anden Reksten Rederei A.S. v. Triton Int'l Carriers Ltd., 1980 AMC 678, (S.D.N.Y. 1976);
19 Page 19 N.H. Shipping Corp. v. Freights of S/S Jackie Hause, 181 F. Supp. 165, (S.D.N.Y. 1960); The Oceano, 148 F. 131, (S.D.N.Y. 1906). n53. Krauss Bros. Lumber Co. v. Dimon S.S. Corp., 290 U.S. 117, 125, 1933 AMC 1578, (1933). n54. Horn v. CIA de Navegacion Fruco, S.A., 404 F.2d 422, (5th Cir. 1968); The Oceano, 148 F. at 133. n55. Clause 18, Standard N.Y. Produce & Exchange Form. n56. Union Industrielle et Maritime v. Nimpex Int'l, Inc., 459 F.2d 926, 929 (7th Cir. 1972); Am. Steel Barge Co. v. Chesapeake & Ohio Coal Agency, 115 F. 669, 677 (1st Cir. 1902); Freights of the S.S. Jackie Hause, 181 F. Supp. at 170; Jebson v. A Cargo of Hemp, 228 F. 143, 148 (D. Mass. 1915); Larsen v. 150 Bales of Sisal Grass, 147 F. 783, (S.D. Ala. 1906); The Albert Dumois v. 457 Bags of Coffee, 54 F. 529, (E.D.N.Y. 1893). n57. United States v. The Freights of The Mount Shasta, 274 U.S. 466, 470, 1927 AMC 943, 944 (1927); see also In re Bauer S.S. Corp., 167 F. Supp. 909, (S.D.N.Y. 1957); Gray v. The Freights of The Kate, 63 F. 707, 708 (S.D.N.Y. 1894). n58. Arochem Corp. v. Wilomi, Inc., 962 F.2d 496, , 1992 AMC 2347, (5th Cir. 1992). n59. See infra Part IV.E. n60. See Ryan Stevedoring Co. v. United States, 175 F.2d 490, 493, 1949 AMC 1363, (2d Cir. 1949) (commenting on The Lord Derby, 17 F. 265 (C.C.E.D. La. 1883), and questioning why libel against a vessel in admiralty concerning a bite from a dog laden aboard the vessel was not in fact a libel against the dog itself, in rem).
20 Page 20 n61. General S.A. v. P. Consorcio Perquero del Peru, S.A., 1974 AMC 2343, 2349 (S.D.N.Y. 1972) (noting that spontaneous combustion destroyed fish meal cargo). n62. Beverly Hills Nat'l Bank & Trust Co. v. Compania de Navegacione Almirante S.A., 437 F.2d 301, 304 (9th Cir. 1971); Egan v. A Cargo of Spruce Lath, 41 F. 830, (S.D.N.Y. 1890), aff'd, 43 F. 480 (C.C.S.D.N.Y. 1890). The lien may survive delivery if terms in the bill of lading so provide. See Am. President Lines, Ltd. v. Cosmos Enters. Co., 1991 AMC 2956, 2957 (S.D. Tex. 1991). n63. See Schoenbaum, supra note 2, 15-1, at n64. See id. Once again, U.C.C. and other nonmaritime liens are displaced, as shall be explained later in this Article. See sources cited infra note 137. n65. See, e.g., The Farembo, 44 F. Supp. 915, (E.D.N.Y. 1942) (allowing recovery in general average where the vessel owner put the vessel into a port of refuge for repair of damage caused by high winds and waves). n66. The Sabine, 101 U.S. 384, 386 (1879). n67. Id. at n68. See id. (noting that suits for salvage may be in rem against the property salved or proceeds thereof). n69. Cal. Dep't of Fish & Game v. S.S. Bournemouth, 307 F. Supp. 922, (C.D. Cal. 1969). n70. Rivers and Harbors Appropriation Act, 33 U.S.C. 403 (2000); id. 408; Federal Water Pollution Control Act, id