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crew and their skill in navigation fails or the ship encounters perils of the sea and accident happens to the cargo you are not responsible for the damage. Your exemption from responsibility in this case is given by the statute and you do not need to bargain for it.

4. Your exemption from liability does not extend to damage due to improper loading and stowage.

II. Insurance.—Where the shipowner is entitled to the benefits of the Limited Liability Law, his liability is terminated by a surrender or abandonment of the ship and her pending freight. He may retain the insurance and her creditors can not claim it. He is not obliged to account for the insurance money which he may have collected for the loss or damage to his vessel. In this respect the law of the United States is more liberal to the shipowner than that of many other countries. The question was decided in the cases of the City of Norwich, 118 U. S. 468, and the Scotland, in the same volume at page 507. The latter will illustrate the rule; the Scotland and the Dyer were in collision and both sunk; the lower court held the Scotland at fault and awarded the owners of the Dyer upwards of $250,000, as damages. The value of the Scotland before the collision was about $500,000, and her owners had collected insurance on her to the amount of $299,867.42. The value of her wreckage was $4,927.85. The Supreme Court held that her owners' liability was limited to this last amount and that the owners of the Dyer could not claim any part of the insurance.

12. Single Ship Companies.-This is a form of organization which has the advantages of the general law of corporations in limiting the liability of shareholders to the amount of their stock. If such a corporation has all its capital invested in a single ship, its liability is, of course, limited to the amount of the investment and if the shares have been paid in full there can be no further calls upon the shareholders. When the ship is lost, all liabilities are lost with her except such as the shareholders may have personally guaranteed or assumed. The corporation which owns several ships will obviously not have the same degree of limitation. Hence the popularity among investors, particularly in England, of the single ship company. As far as the corporate affairs are concerned the laws of the State in which it is incorporated must be observed. In the maritime law, its status is that of an indi

vidual shipowner. The privity or knowledge of its managing officers may preclude it from the protection of the admiralty law of limited liability; if so, it cannot retain the insurance or any other part of its capital against its creditors, but, when the capital is lost or exhausted, the stockholders who have paid in full for their shares will have no further responsibility.

REFERENCES FOR GENERAL READING

Admiralty (1910), Benedict, Chapter XXXV.
Carriers, Wheeler, Chapters I-III.

Admiralty, Hughes, Chapters VIII and XVI.
Collisions at Sea, Marsden (1904), Chapter VII.
Limitation of Liability, Van Santvoord, 1887.
Rebecca-Ware, (Fed. Cas. No. 11,629).
Trans. Co. v. Wright, 13 Wall. 104.
Benefactor, 103 U. S. 247.

Scotland, 105 U. S. 24.

City of Norwich, 118 U. S. 468.
O'Brien v. Miller, 168 U. S. 287.
La Bourgogne, 210 U. S. 95.

Richardson v. Harmon, 222 U. S. 96.
Pendleton v. Benner Line, 246 U. S. 353.

CHAPTER IX

MARITIME LIENS

1. How Created. In general and within the limits hereinafter mentioned, every service rendered to a ship and every injury done by a ship, creates a maritime lien upon her for the benefit of the individual who did the work or suffered the wrong.

Those who furnish supplies or fuel or provisions, or make repairs, or render services, as well as the members of the crew and officers (except the master) acquire such liens for the collection of the amounts due them. A like right or privilege accrues for the damage done through negligence on the part of the ship resulting in damage to persons or property, as by collision or injury to cargo. So these liens are divided into two classes, those ex contractu (arising out of agreements, express or implied) and those ex delicto (arising out of wrongs or torts).

The authority of the master to obligate the ship so that a lien arises has been discussed under the title "Master."

The managing owner, ship's husband, master or any person to whom the management of the vessel at port of supply is entrusted may by ordering supplies, repairs, render the vessel liable to a maritime lien. If the master be drunk or disabled and another person is discharging his duties and is in effect for the time being master of the ship, such person may create a valid lien. Thus it has been held that the vessel is bound for supplies ordered by the mate acting during the illness of the master. The vessel is also bound for supplies furnished on the order of any member of the ship's company and with the master's knowledge and acquiescence. It is customary in the administration of a large modern ship for the head of each department, e. g., the steward, chief engineer, to order supplies and for these the vessel is responsible, but only on the theory that the purchases are made with the master's authority, and if the person contracting the obligation has acted in excess of the powers delegated to him by the master, the ship will not be bound. It is incumbent on the person furnishing goods to a vessel to inquire into the au

thority of the individual ordering the same. Moreover, if the goods ordered are greatly in excess of the vessel's needs, it is incumbent upon the supplier to know that fact and if the goods ordered, even by the master personally, are greatly in excess of the vessel's needs the ship will not be bound.

A maritime lien attaches to the offending ship only, and not to her cargo (except for unpaid freight) and this is true even though the cargo belonged to the owner of the offending ship. As was said by Mr. Justice Brown in the case of the Bristol, 29 Fed. 867:

The cargo, except for the collection of the freight due, cannot be held for the faults of the ship. There being no lien beyond freight due, no proceeding in rem lies against the cargo for damages by collision, if the freight be paid, whether the cargo belongs to the owner of the offending vessel or not; and, if arrested, the cargo must be released upon the payment of the freight due.

A maritime lien, being essentially a remedy against the vessel, may attach even in a case in which the owners are not personally responsible; as for instance, where a state pilot, in charge of a ship under a state statute which renders his employment compulsory, negligently brought the ship into collision, she was subjected to a lien for the damage done, although the pilot was in no sense the agent of the owners, and no personal liability rested upon them. The China, 7 Wall. 53.

The lien attaches only by virtue of contracts or torts which are wholly maritime in their nature. It is frequently difficult to determine the nature of a contract or tort. Thus persons digging ice and snow from around a vessel on a beach, and about to be launched did not acquire a maritime lien because the service was performed on shore. Whereas persons who floated a vessel which had been carried far ashore were held to have performed a maritime service and to be entitled to a lien. In a case in which a vessel communicated fire to a wharf to which she was made fast, it was held that the tort was not maritime, whereas, had she been in the stream and had communicated fire to another vessel in the stream, the tort would have been maritime and would have given rise to a maritime lien (Hough v. Trans. Co., 3 Wall. 20). Conversely a tort having its inception on land and completed on shipboard will give rise to a lien. As for example where a man working on board ship was injured by a piece of lumber thrown through a chute by a man working on a wharf. (Herman v. Mill Co., 69 Fed. 646).

A lien arises in favor of the owners or temporary owners of a vessel upon cargo actually on board for unpaid freight and for demurrage. This is the only case in which possession of the security is essential to the existence of a maritime lien. If the cargo is removed from the ship the maritime lien is lost. In this class of cases suit to enforce the lien should be instituted before the cargo is discharged.

2. Essential Value. The essential value of these liens lies in the right they give to have the ship arrested and sold by a court of admiralty for their satisfaction, and in the speed and security with which the remedy can be applied. The vessel is arrested immediately upon the filing of the libel, before the liability is proven or the case tried, and may not leave port without giving bond to secure the claim (see Chapter XVII, Admiralty Remedies).

3. Independent of Notice or Possesssion.-They do not depend upon notice or recording or possession and do not in any way resemble a mortgage. They are, in fact, an actual property in the ship, created as soon as the service is rendered or the wrong suffered (Yankee Blade, 19 How. 82).

4. Secret. As these liens do not depend upon notice or record, they are essentially secret in their nature and even purchase of the ship, in good faith and for value, will not be protected against them (The Marjorie, 151 Fed. 183).

5. Diligence Required. On the other hand the law requires the lienor to be diligent in enforcing his lien so that third parties may not be unduly prejudiced thereby. If he is not diligent, the court will hold him guilty of laches and the lien may become stale as against all parties other than the owner.

6. Rules of Diligence. There are no hard and fast rules defining diligence or the limit after which a lien becomes stale. Under the general maritime law, the voyage was the test; liens which accrued on one voyage were required to be enforced before another voyage was made or they became stale as to those of the latter. In deep-sea navigation, where the voyages are prolonged, this rule still obtains. On the Great Lakes, where the trips or voyages are comparatively short, and navigation is closed by the winters, the season of navigation is the rule. Liens not enforced during the season or the following winter will be postponed to those of the later season. In New York harbor, the local conditions have resulted in a forty-day rule; in Virginia, under some

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