SCHUCHARDT v. The ANGELEQUE, 21 F. Cas. 742

THE COURT (BETTS, District Judge) held: First. That this court, proceeding on the instance side, in actions by material men, freighters, and passengers against the ship, had no authority to' compel the mortgagees to submit their mortgage interest to the order of the court, or to take satisfaction therefor, even at its full amount; much less to order the discharge of its lien on the ship on payment to the mortgagees of less than the mortgage debt. Second.

That the mortgagees never submitted themselves, or their mortgage lien or debt, to the jurisdiction of this court, but, on the contrary, appeared at the place and time of the marshal’s sale, and gave notice of the subsistence of their legal incumbrance and right against the ship. Third.

That, had such submission been made, the court of admiralty possesses no power over the creditors or their debts adequate to coerce the parties to an involuntary relinquishment or adjustment of their rights, or enabling it to fix a scale of equities between these numerous suitors, prosecuting distinct interests, or to compel any of them to forego their entire legal rights and remedies. Fourth.

That the libelants, establish no right of action against the fund in court, as the res chargeable with their debts, and that they are not entitled to arrest them, or partake in their distribution as remnants or proceeds of the ship on which they held an in-cumbrance. because the court has never displaced that incumbrance from the ship, and because these proceeds are more than absorbed by decrees in court directly against the ship, and they do not, therefore, continue in court, nor are they at the disposal of the court as remnants, so that the court can take cognizance of the equities thereto as between the owner of the ship and his creditors.

Fifth.

That courts of admiralty have not inherently the faculty to use chancery powers or processes to compel creditors to yield legal rights, and give place to claims clothed with no more than an equitable character, nor, as a general principle, to act upon parties or interests not before it by regular course of suit, nor to coerce suitors pursuing by course of law the remedies appropriate to the jurisdiction of the court, nor others, not parties before the court, to submit to a marshaling of assets within the control of the court, for the purpose of putting equitable claims thereto on the same footing with maritime liens in suit, or legal rights.

Sixth. That, as a general principle, debts resting on a maritime privilege alone become incumbrances, and bind the res under lien, when the same is attached thereon, and not before. Accordingly, suitors in admiralty take priority of satisfaction of lien debts, in the order of the arrest of the property, subject thereto, and not pro rata, nor in the order in which the debts were incurred, nor with reference to the time of indebtment, except in the ease of express hypothecation. It is therefore ordered by the court that the libel filed in this cause by the mortgagees be dismissed, with costs.

And the court, adhering to the spirit of the order in suits against the ship Angelique. entered in October term last, directs that the lion creditors, other than the libelants, be paid out of the fund in court in the order in which their attachments were levied, respectively, and when no attachment was served in suits under prosecution, then in the order in which the actions were instituted.

Should there be in court remnants of the proceeds of the said ship after satisfaction of the suits aforesaid, the court has competent authority, upon the applications before it, to direct a distribution of such remnants equitably among creditors having liens on the ship, or maritime demands against her, as against the claim or right of the owner of the ship to such fund; and, on proper motion, reference will be made to a commissioner to marshal the assets in court to that end. [NOTE.

From the decree entered dismissing tile libel, an appeal was taken by the libelants to the circuit court, where the decree was affirmed, but upon a different ground, viz. that the’mortgage lien had no priority over the sub' sequent maritime liens. The opinion of the district court upon the priorities among the several maritime liens was affirmed. Case No. 12,' 483c. A fee of $250 was allowed counsel for the lienholders by the district court. Id. 12,-705.

The decree dismissing the libel was affirmed, upon appeal to the supreme court, upon a still different ground, viz. that the libel was in effect a suit to foreclose a mortgage, and, as such, not within the admiralty jurisdiction. The court expressed no opinion upon the conflicting points in the opinions of the district and circuit courts. 19 How. (60 U. S.) 239.

The Ocean Mutual Association Company, who claimed to be subrogated to the rights of Schuchardt and Gebhard, filed a petition in the circuit court, after the decision of the supreme court, seeking a review of the district court decrees for the purpose-of appearing as claimants in the original actions. The court held that the holders of the several maritime liens had priority over the mortgage by the maritime law, and that such a petition, seeking to establish the mortgage against their liens, could not be allowed. Case No. 12,483d.

This last decision pointedly overrules the opinion of Judge Betts upon this point, in this case and in Case JSo. 12,483b.]