Everett Steamship Corp. v. Liberty Navigation & Trading Co.

486 F.2d 462
CourtCourt of Appeals for the Ninth Circuit
DecidedOctober 5, 1973
DocketNo. 71-1009
StatusPublished
Cited by1 cases

This text of 486 F.2d 462 (Everett Steamship Corp. v. Liberty Navigation & Trading Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Everett Steamship Corp. v. Liberty Navigation & Trading Co., 486 F.2d 462 (9th Cir. 1973).

Opinions

SOLOMON, District Judge:

Everett Steamship Corporation (Everett), a Panamanian corporation, filed this action against the United States (the Government) to recover on maritime liens on the SS Galicia Defender. The District Court granted summary judgment against Everett. Everett appeals.

The Government time chartered the Galicia Defender from Liberty Navigation and Trading Co., Inc. (Liberty). While under the time charter, Everett was the husbanding agent for the vessel. Between February 1, 1967, and February 2, 1968, when the vessel was in far eastern ports, Everett advanced $20,040.-47 for .repairs, supplies, and wages for the crew. Everett claims a maritime lien against the vessel for those amounts.

In May, 1968, the Galicia Defender, loaded with cargo for Vietnam, lay idle in the Port of San Francisco because Liberty could not pay the crew. Rather than bear the expense of unloading the cargo, the Government suspended the time charter and, on May 4, 1968, demise chartered the vessel for a round trip voyage to Vietnam.

On June 24, 1968, the Galicia Defender returned from Vietnam. It entered the Port of Oakland where it was seized in an in rem action brought by West Coast Ship Chandlers and others. The Government declared the Galicia Defender off-hire and the vessel was sold to pay maritime liens. Everett intervened. It recovered only $1,935.00 because other liens had higher priority.

Five weeks before the seizure in the in rem action and when the Galicia Defender was outside the territorial waters of the United States on her way to Viet[464]*464nam, Everett filed this action. The complaint alleged that the United States, as demise charterer, was owner pro hac vice, 46 U.S.C. § 186, and that Everett was unable to libel the vessel in rem because of 46 U.S.C. § 741. The complaint claimed a maritime lien on the Galicia Defender and asserted that the lien was enforceable against the Government by a libel in personam under the Suits in Admiralty Act, 46 U.S.C. § 742.

In its answer the Government alleged that the court lacked jurisdiction because the vessel was outside the territorial waters of the district and asserted that 46 U.S.C. § 742 did not apply because no action could have been maintained if the vessel had been privately operated. The Government also stated that the vessel was on its way to Vietnam and would be redelivered to its owner upon its return to the United States.

The District Court dismissed the complaint with leave to amend in an order dated May 28, 1970. Everett then filed an amended complaint in which it also claimed damages against the Government for the loss of priority of its lien because 46 U.S.C. § 741 prevented it from libeling the vessel in rem. On October 6, 1970, the court granted the Government’s motion for summary judgment. The court held that Everett’s inability to libel the Galicia Defender was because of the vessel’s absence from the jurisdiction and not because of any immunity under Section 741. The court also ruled that the arrest and sale of the ship did not violate Section 741.

The Suits in Admiralty Act (the Act) prohibits maritime lienholders from seizing vessels in in rem actions if the vessels are owned or operated by the United States. 46 U.S.C. § 741. As a substitute for recovering against the vessel, the Act allows lienholders to enforce their liens through in personam actions against the Government. 46 U.S.C. § 742. The Act reserves to the United States the benefits of all exemptions and limitations of liability accorded by law to owners, charterers, operators, or agents of vessels. 46 U.S.C. § 746. The Act also seeks to protect government vessels from seizure in foreign ports by giving the Secretary of State discretion to intervene in foreign proceedings. 46 U.S.C. § 747.

As a demise charterer the Government was liable only in rem for debts incurred on the credit of the vessel before the demise charter. When Everett filed its complaint on May 17, 1968, the District Court had no in rem jurisdiction since the vessel was outside the waters of the United States. Blamberg Bros. v. United States, 260 U.S. 452, 43 S.Ct. 179, 67 L.Ed. 346 (1923).

Everett argues that the District Court had jurisdiction over an in personam action under Section 742 to enforce an in rem liability even though the vessel libeled was not within the territorial waters of the United States. Everett contends that Section 742 transformed its in rem rights into an in personam cause of action.

There is no merit in this contention. In all of the cases Everett cites to support this contention, the Government had in personam liability under the common law or the law of admiralty. No case held that an in rem action was made in personam by Section 742 for the purposes of jurisdiction.

In Eastern Transportation Company v. United States, 272 U.S. 675, 47 S.Ct. 289, 71 L.Ed. 472 (1926), the Government breached its statutory duty to mark the wreck of a government-owned merchant vessel that sank in a navigable channel. Plaintiff’s barge collided with the sunken wreck and sank. The trial court held that the sunken vessel did not provide a res which would support an in rem action. The Supreme Court reversed. It held that the breach of the duty to place a marker on the wreck created a direct cause of action in tort against the Government for which plaintiff could maintain an in personam action. When the Government had in personam liability, Section 742 did not require that damages be limited to the [465]*465value of the vessel under in rem principles.

In Hoiness v. United States, 335 U.S. 297, 69 S.Ct. 70, 93 L.Ed. 16 (1948), a seaman was injured aboard a merchant vessel owned by the United States. The complaint did not allege that the plaintiff was a resident of the district in which the action was brought or that the vessel was within the district when the complaint was filed. The District Court dismissed for lack of jurisdiction. The Supreme Court reversed and held that the provision in Section 742 that the plaintiff be a resident of the district or that the vessel be located within the district related to venue and not jurisdiction.

The broad holding in Hoiness must be read in connection with the facts of the case which show in personam

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
486 F.2d 462, Counsel Stack Legal Research, https://law.counselstack.com/opinion/everett-steamship-corp-v-liberty-navigation-trading-co-ca9-1973.