Iroquois Transportation Company v. Ed Laney Forge Iron Company/Opinion of the Court

The Michigan statute under which the liens are claimed in this case is as follows:

'Third Compiled Laws of Michigan, p. 3254:

'(10789) Sec. 2. Every water craft of above 5 tons burden, used or intended to be used, in navigating the waters of this state, shall be subject to a lien thereon: 'First, for all debts contracted by the owner or part owner, master, clerk, agent, or steward of such craft, on account of supplies and provisions furnished for the use of said water craft, on account of work done or services rendered, on board of such craft by seamen or any employee other than the master thereof; on account of work done or service rendered by any person in or about the loading or unloading of said water craft; on account of work done or materials furnished by mechanics, tradesmen, or others, in or about the building, repairing, fitting, furnishing, or equipping such craft: Provided, That when labor shall be performed or materials furnished, as aforesaid, by a subcontractor or workman other than an original contractor, and the same is not paid for, said person or persons may give the owner or his agent, or the master or clerk of said craft, timely notice of his or their said claim, and from thenceforth said person or persons shall have a lien upon said craft pro rata for his or their said claims, to the amount that may be due by said owner to said original contractor for work or labor then done on said water craft.'

Messrs. Charles E. Kremer and William T. Gray for plaintiff in error.

[Argument of Counsel from page 357 intentionally omitted]

Messrs. Herbert K. Oakes, John C. Shaw, Charles B. Warren, William B. Cady, Joseph C. Hamblen, Jr., and Hugh Shepherd for defendant in error.

[Argument of Counsel from pages 358-360 intentionally omitted]

Several objections are urged by the plaintiff in error which, if sustained, will result in the reversal of the judgments of the supreme court of Michigan. Some of them are of a non-Federal character. It is insisted that the statute does not apply in this case, because the steamer Winnebago was not to be used in navigating the waters of Michigan, within the terms of the statute. But this only presents a question of state law, upon which the judgment of the state court is final and conclusive. The same may be said as to the objection because the transportation company was a bona fide purchaser without notice of complainant's lien, and because complainant did not within a year file its claim for a lien with the proper court in the county in which it resided. These are state questions, likewise concluded by the decision of the state court.

It is further contended that to seize the vessel and subject her to sale and the proceeds thereof to distribution in the state court would be in direct conflict with the exclusive jurisdiction in admiralty in the courts of the United States in favor of liens of a maritime character, and therefore the Michigan act is unconstitutional. No maritime lien is asserted in this case, and it is merely a matter of speculation as to whether any such claim existed, or might be thereafter asserted. No holder of any such maritime lien is here contesting the constitutionality of the state law.

In a case from a state court, this court does not listen to objections of those who do not come within the class whose constitutional rights are alleged to be invaded; or hold a law unconstitutional because, as against the class making no complaint, the law might be so held. This was distinctly ruled in a case decided at this term. New York ex rel. Hatch v. Reardon, 204 U.S. 152, 51 L. ed. 415, 27 Sup. Ct. Rep. 188. See also Albany County v. Stanley, 105 U.S. 305-311, 26 L. ed. 1044-1049; Lampasas v. Bell, 180 U.S. 276, 283, 284, 45 L. ed. 527, 530, 531, 21 Sup. Ct. Rep. 368; Clark v. Kansas City, 176 U.S. 114-118, 44 L. ed. 392-396, 20 Sup. Ct. Rep. 284; Cronin v. Adams, 192 U.S. 108-114, 48 L. ed. 365-368, 24 Sup. Ct. Rep. 219.

There is no one in position in this case to make this objection, and, for aught that this record discloses, no such maritime lien existed. If this statute is broad enough to include strictly maritime liens, it can only be held unconstitutional, in a case coming from a state court, where the complaint on that ground is made by the holder of such a demand. We agree with Judge Severns, speaking for the circuit court of appeals for the sixth circuit, in a case directly involving this question, where other claimants upon the Winnebago had removed a case to the United States circuit court for the eastern district of Michigan, whence it was taken to the circuit court of appeals:

'And the fact that she [the Winnebago] might become subject to maritime liens would not destroy liens already lawfully acquired. It is true she might become subject to maritime liens which would be superior to the existing lien, and that such liens would have to be enforced in the admiralty. But that possibility does not defeat the enforcement by a state court of the nonmaritime lien to which she is subject. How else is the owner of the latter to obtain his remedy? It may be the vessel will never become subject to maritime liens at all; and, if so, the holder of the existing lien may never have even the privilege of proving his claim in some cause instituted for another purpose. But no such supposed embarrassment has yet occurred. And they are as yet imaginary. But suppose such other liens should attach. That should not prevent the enforcement of the earlier lien in the proper court. If the holder of the earlier lien delays his action, he subjects himself to the danger of superior liens becoming fastened, and the enforcement of his own lien in the state court must leave the vessel subject to the superior liens of which the state court cannot take cognizance. If occasion requires, and the admiralty court enforces the superior liens, it is in no wise obstructed by the action of the state court, and a title under a decree of the former court would defeat the title gained under the decree of the state court. The case of Moran v. Sturges, 154 U.S. 256, 38 L.ed. 981, 14 Sup. Ct. Rep. 1019, is a good illustration of this subject. There is no difficulty other than such as may happen in case one court should take and have possession of the vessel at a time when the other should require it; but that is an incident common along all the lines of concurrent proceedings in the state and Federal courts, and gives no ground for the denial of jurisdiction to either.' The Winnebago, 73 C. C. A. 295, 141 Fed. 945.

It is next insisted that the materials and supplies were not furnished on the credit of the vessel, but were contracted for, furnished, and delivered on the credit of the Columbia Iron Works.

The findings upon this proposition are again questions within the exclusive jurisdiction of the state court. The findings will not be disturbed here.

It is next objected that the court erred because certain items were allowed for material furnished the vessel after she was launched, and therefore the subject of exclusive jurisdiction for which a lien could only be enforced in the admiralty. But we agree with the state court that these items were really furnished for the completion of the vessel, and were fairly a part of her original construction. In such a case the remedy was within the jurisdiction of the state court. The Iosco, 1 Brown, Adm. 495, Fed. Cas. No. 7,060; The Victorian, 24 Or. 121, 41 Am. St. Rep. 838, 32 Pac. 1040; The Winnebago, 73 C. C. A. 295, 141 Fed. 945.

It is urged that the attempt to enforce the lien on the vessel was while she was engaged in interstate commerce, and therefore proceedings against her were unlawful and void, in view of the exclusive control of this subject by Congress under the Constitution and laws of the United States. But it must be remembered that concerning contracts not maritime in their nature, the state has authority to make lawa and enforce liens, and it is no valid objection that the enforcement of such laws may prevent or obstruct the prosecution of a voyage of an interstate character. The laws of the states enforcing attachment and execution in cases cognizable in state courts have been sustained and upheld. Johnson v. Chicago & P. Elevator Co. 119 U.S. 388-398, 30 L. ed. 447-480, 7 Sup. Ct. Rep. 254. The State may pass laws enforcing the rights of its citizens which affect interstate commerce, but fall short of regulating such commerce in the sense in which the Constitution gives exclusive jurisdiction to Congress. Sherlock v. Alling, 93 U.S. 99-103, 23 L. ed. 819, 820; Kidd v. Pearson, 128 U.S. 1, 23, 32 L. ed. 346, 351, 2 Inters. Com. Rep. 232, 9 Sup. Ct. Rep. 6; Pennsylvania R. Co. v. Hughes, 191 U.S. 477, 48 L. ed. 268, 24 Sup. Ct. Rep. 132.

Upon the subject, Mr. Justice Brown, speaking for the court in Knapp, S. & Co. Co. v. McCaffrey, 177 U.S. 638-642, 44 L. ed. 921-923, 20 Sup. Ct. Rep. 824-827, said:

'That wherever any lien is given by a state statute for a cause of action cognizable in admiralty, either in rem or in personam, proceedings in rem to enforce such lien are within the exclusive jurisdiction of the admiralty courts.

'But the converse of this proposition is equally true, that if a lien upon a vessel be created for a claim over which a court of admiralty has no jurisdiction in any form, such lien may be enforced in the courts of the state. Thus, as the admiralty jurisdiction does not extend to a contract for building a vessel, or to work done or materials furnished in its construction (People's Ferry Co. v. Berrs, 20 How. 393, 15 L. ed. 961; Roach v. Chapman, 22 How. 129, 16 L. ed. 294), we held in Edwards v. Elliott, 21 Wall. 532, 22 L. ed. 487, that in respect to such contracts it was competent for the states to enact such laws as their legislatures might deem just and expedient, and to provide for their enforcement in rem.'

The contract in this case being for the construction of a vessel, and its enforcement within the power and jurisdiction of the state courts, we do not think that execution of such a decree can be avoided because the vessel engaged in interstate commerce.

Finally, an elaborate and able argument is made in support of the contention that a contract to build a ship is a maritime contract, and therefore can be enforced only in admiralty; but, as late as this term, in Graham & M. Transp. Co. v. Craig Shipguilding Co., this contention was overruled upon the authority of the previous decisions of this court. 203 U.S. 577, 51 L. ed. -, 27 Sup. Ct. Rep. 777.

The judgments of the Supreme Court of Michigan are affirmed.