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Admiralty 03.02 02/03/2010 15:01:00
[Beginning @ 46:05 with maritime liens]
MARITIME LIENS
- from Gilmore and Black, reading about law of maritime liens
law of maritime liens has been plagued by an inept terminaolgy andoverdose of theory and a failure to abide by Holmes admonition that general
proposition
- a maritime lien is not a lien at all in the common law sense of the
term
- a consensual dry land lien has the following characteristics:
it is a interest in a debtors property held by a creditor to secure
repayment of a debt contractual in origin
lien holder may only foreclose after debtor has defaulted on the
principal
foreclosure may be had by legal process or extralegal action taken
by the creditor himself (repossession)
priority among competing liens goes according to time at which
attached, first in time takes priority
validity of most liens against 3rd persons depends on the
lienholders taking possession fo the collateral or filing public notice
of the lien (to make good against the world, the creditor must
either have possession fo property ro file notice of lien in publicrecords)
Land liens may be voluntary or statutory
Maritime lien
- arises out of K or tort
- parties cannot confer lien status on a claim by agreement; can only
get where law provides
- in case of tort liens, no credit period, no concept of default
except for preferred shipment, K (couldnt understand)
- maritime lien can only be executed (foreclosed upon) by admiralty
court acting in rem
- priority: among liens of same rank, last in time is first in right
(opposite0
- validity: depends neither on possession or notice being filed
(therefore sometimes called a secret lien also referred to as indelible @
50min); lien is good against the world
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- the mere fact that we are studying maritime liens, means that we
are studying something uniquely maritime
Look on p. 171, see a list of claims that give rise to maritime liens:
1. Lien law varies from country to country; the US probably has the
widest variety of claims that give rise to maritime liens
there are arrest and lien conventions but have not and will not be
adopted in US
Why are liens important?
Bc allow you to arrest the property (obtain jurisdiction and get
security for claim)
More importantly, claims secured by liens have very hi priority
among creditors
o Lien claimants have a higher priority and even within the lienclaims themselves there is a certain priority
o So whether or not creditor will get paid depends greatly on
whether have a lien and where in the priority spectrum the
lien falls in
What is a maritime lien in terms of legal theory?
The question whether or not this comes from old roman law.by
and large our courts dont worry about this much
The Brig Nester (263)
Justice Story puts in his two cents about the derivation and source
of maritime liens.but there are disagreeing scholars
Doesnt appear worth reading because thats all he said about it
The Bold Buccleugh (p. 263)
Facts: Have a collision between a vessel owned by A and a vessel
owned by B. An action is commenced by A against B. Result of
which the property of B is seized. Ultimately the property is
released and B sells the vessel to C. A then has the vessel
arrested. C comes in and contests.
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Reasoning: The first action (seizure) was merely an attachment,
not an action to execute the lien. Therefore, the seizure did not
strip the vessel of the lien. (remember if vessel is sold by judicial
sale, all liens remain attached; different from sale of vessel under
arrest, in which all liens stripped). The court said that A has a
maritime lien resulting from the collision with B, the tortfeasors.
That lien remained until it was discharged. Therefore the mere fact
that there was a prior proceeding or the fac that thtere was a sale
to a g.f. purchaser for fair value does NOT destroy the lien
The lien is a secret lien because not based on possession or filing in
public records
This means if you are engaged in the sale of a used vessel, you
must be very very careful about finding out whether or not there
are any liens on the vessel (because will greatly affect the vessels
value).
There are limited circumstances in which a lien will be lostone ofthe circumstances is laches (if the P waits too long to assert the
lienesp if in the interim 3d parties have intervened and would be
disadvantaged)
o In looking at laches, must look at the practices in the industry
to see if P has waited too long to assert the claim
o
The Brig Malek Adhel
Facts: The D. Ct of MD issued a decree of seizure of BMA for
violation of an anti-piracy act. Cir Ct affirmed. Between the July 6
and August 20, the crew was accused of engaging in pirate
aggression but the owners were innocent.
Issue: Whether the owners can be faulted by the vessels violation
of the anti-piracy statute?
Reasoning: Act makes no exception for aggression made without
cooperation of woners.
Force: Under US law, ships engaged in piractical acts are subject
to forfeiture. Here, the ships master was acting as pirate withoutcooperation of the ships owner. This is based on the idea that the
ship commits the wrong; product of the personification of vessels.
A ship is responsible for its torts and Ks and in this particular case,
the owner says that had nothing to do with the ships piracy. Ct:
We are not holding the ships owner personally responsible for the
piratical acts; but are holding the ship responsible. Therefore ship
owner has no complaint.
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What about the cargo of the vessel? When one has a lien against a
vessel, do you have a lien against the cargo?
No, when there is Congressional silence as to the cargo, dont
presume that it is involved
If there is a collision between As vessel and Bs vessel and B is at
fault, then innocent cargo on Bs vessel not subject o lien
Can there be liens against cargo? Yes, for ex, where the shipper
has not paid freight or where a salvor saves the vessel and the
cargo (then salvor would get lien against both). May get lien
against cargo for general average
But generally, where the ship is subject to a lien pursuant to a tort
commited by a ship or a breach of contract committed by a ship,
then no lien against cargo.
Notes post case
Maritime liens only attach to vessels Vessels considered to consist of the hull, tackle, apparel and
furniture (i.e. component part included; component parts = things
attached to vessel so as to become an intergral part of it)
Maritime lien attaches to component parts of vessel even if the
component parts are owned separately.
Accessories = things placed on a vessel for its completion or
ornamentation, but not attached so as to become an integral part of
it
o When accessories belong to vessel owner, then subject to any
liens placed on vessel
o When not owned by shipowenr, then courts tend to apply the
common-law rules developed with respect to Fixtures
o Accessories belong to a vendor under a conditional sale are
reached by maritime liens on vessel
Leased things
o Maritime liens do not attach to leased things such as radio
equipment, fishfinders, wireless equipmento Lease equipment DOES not beome subject to a preferred ship
mortgage even if it could become subject to traditional
maritime liens.
Cargo, etc
o Cargo maritime lien doesnt attach
o Prepraid freight = no lien
o Unpaid seamen however may have a lien for wages on earned
freight.
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