White's Bank v. Smith

ERROR to the Circuit Court for the Northern District of New York.

The case was this:

An act of Congress, 'providing for the recording of conveyances of vessels and for other purposes,' and passed July 29th, 1850, thus enacts:

'No bill of sale, mortgage, hypothecation, or conveyance of any vessel, or part of any vessel of the United States, shall be valid against any person other than the grantor or mortgagor, his heirs and devisees, and persons having actual notice thereof, unless such bill of sale, mortgage, hypothecation, or conveyance, be recorded in the office of the collector of customs where such vessel is registered or enrolled.'

And a statute of the State of New York thus enacts:

'Every mortgage of chattels which shall not be accompanied, &c., shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers and mortgagees in good faith, unless the mortgage, or a true copy thereof, shall be filed as directed in the succeeding section of this act.'

The 'succeeding section' above referred to directs where the mortgage shall be filed. And a third section proceeds:

'Every mortgage filed in pursuance of this act, shall cease to be valid as against the creditors of the person making the same, or against subsequent mortgagees in good faith, after the expiration of one year from the filing thereof, unless within, &c., a true copy of such mortgage shall be again filed in the office of the clerk or register aforesaid of the town or city where the mortgagor shall then reside.'

With these two acts, one of the United States and the other of the State of New York, in force, one Hoyt, then a resident of Buffalo, Erie County, New York, executed, on the 22d May, 1863, a mortgage to White's Bank, of Buffalo, upon the schooner Emmett, of which he was owner. This mortgage was recorded, on the 12th of the June following, in the collector's office at Buffalo, where the Emmett was duly enrolled, and where, as just said, Hoyt, her owner, resided. The mortgage was filed, also, in the office of the clerk of the county of Erie, on the 5th June, 1863, according to the requirement of the above-quoted law of New York, but it was not refiled at the end of a year.

Subsequently to the date of this mortgage of Hoyt to White's Bank, the vessel became the property of one Zahn, residing at Sandusky, Ohio; and on the 2d June, 1865, he mortgaged her to one Smith. The mortgage to Smith was recorded in the collector's office, at the port of Sandusky, Ohio, on the 17th of June, 1865, where the Emmett was duly enrolled, and at which place, as above stated, the then owner, Zahn, resided. The vessel having been sold subsequently to the date of both the mortgages, under a paramount lien for seamen's wages, and a remnant of the proceeds of sale, after payment of such wages, remaining, but being insufficient to pay either mortgage, the question was, to which of the mortgages it should be applied,-to the first mortgage, that of the bank? or to the subsequent one, Smith's? Smith set up that the lien of the mortgage to White's Bank was lost on account of the omission to refile it in the clerk's office of Erie County at the end of the year, and this position it was which raised the material question in the case; the question, namely, whether or not the recording of the mortgage in the collector's office at Buffalo had the effect, by its own force, and irrespective of the filing in the clerk's office, to give a preference to it over any subsequent purchaser or mortgagee?

The court below decreed that the fund should be appropriated to Smith's mortgage; and White's Bank appealed.

Mr. Haddock, for the appellant, contended that the act of the legislature of New York, so far as it required chattel mortgages upon vessels to be recorded, was a regulation of commerce, and therefore repugnant to that clause of the Federal Constitution which provides that Congress shall have power to regulate commerce with foreign nations, and among the several States. In Steamship Company v. Portwardens, where a statute of Louisiana, imposing a tax upon vessels, was declared repugnant to the Constitution of the United States, the court says: 'The power to regulate commerce was given to Congress in comprehensive terms. It was thus given with the obvious intent to place that commerce beyond interruption or embarrassment, arising from the conflicting or hostile State regulations.' So here the subject-matter, having been acted upon by Congress, was placed beyond the reach or control of the States.

Mr. Rogers, contra:

The act of Congress did not supersede the necessity of a compliance with the statute of New York. It is not repugnant to, nor in any manner in conflict with that law. There is no difficulty in complying with both. To regulate commerce was not the purpose of the State act; and if it does affect commerce, it does so only by acting incidentally on one of its instruments. But if the two acts are inconsistent, which should give way?

The act of Congress is, in some sort, a recording or registry act, having in view, apparently, the protection of the interests of bon a fide purchasers, as well as those of the United States, in the enforcement of its revenue and navigation laws. In so far as it thus assumes to regulate the transfer of the title of parties in such property, is the act constitutional? Can Congress enter the domain of property and assume in all cases to regulate the transfers thereof? We submit that it cannot. The clause of the Constitution which gives to Congress power to 'regulate commerce,' contains nothing in terms giving to that body the power to enter the domain of private property, and to enact what shall be, and what shall not be, a valid transfer thereof. Nor does any such power arise from implication from the power actually given. The rights of property as well as of person are carefully left to the several States, which, according to the theory of the Constitution, were better fitted to regulate them properly than any general government could possibly be. An owner who obtains the enrolment of his vessel because he cannot otherwise engage her in commerce, cannot be deemed thereby to resign his right to sell or dispose of her, by the observance of such formalities as the laws of his State alone prescribe.

If Congress have power to enact this registry law for the protection of creditors, purchasers, &c., simply because a ship is a vehicle of commerce, they have also the power to enact a similar law in relation to all locomotives, cars, wagons, sleighs, and other vehicles used in the carrying on of commerce between the States or with foreign nations; and in fact to regulate the transfer of title to all property which is the subject of commerce.

[A question was also made as to whether the record of the vessel under the act of Congress should be in the vessel's home port, or, as was decided by the Supreme Court of Massachusetts, in Potter v. Irish, and afterwards by the Supreme Court of Maine, in Chadwick v. Baker, in the port of the last registry or enrolment, though not the home port?]

Mr. Justice NELSON delivered the opinion of the court.