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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 and overdose 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 public records) 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

- 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 lien claims 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.

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 of the 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 without cooperation 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.

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 equipment o 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.

02/03/2010 15:01:00

02/03/2010 15:01:00