The opinion of the court was delivered by: Robson, District Judge.
Defendant Calumet Marine Towing Corporation has moved for
summary judgment. For the reasons set forth below, this court
is of the opinion that the motion should be granted.
The plaintiffs are in the business of supplying vessels with
fuel oil, groceries, etc., in or near the Memphis, Tennessee,
area. They sold many items on credit to the motor vessel Linda
Brooks during the period from 1963 to 1966. This ship was then
owned by the defendant, Brooks Liquid Transport, Inc. The last
purchase was made on June 9, 1966. At that time, a balance of
$5,076.18 was due and owing the plaintiffs from defendant
Brooks. Statements were sent in July and August, 1966; a
letter was sent to Brooks requesting payment on August 9,
1966; and several telephone calls to Brooks had been made up
to and including January 24, 1967. All of these attempts to
secure payment failed. The plaintiffs had the opportunity to
seize the M/V Linda Brooks on November 14, 1966, November 27,
1966, and January 14, 1967, when the vessel passed Memphis,
Tennessee. On the first occasion, the plaintiffs sold supplies
to this ship on a C.O.D. basis, even though the account was
then over five months overdue.
The defendant Calumet began negotiations to purchase the M/V
Linda Brooks in December, 1966. On January 17, 1967, defendant
Calumet sent a request to Rivermen Associated, a nonprofit
credit association, for any claims or liens against the M/V
Linda Brooks. On January 20, 1967, Rivermen Associated sent
notices to all its members, including plaintiffs, asking them
to "advise if you have any outstanding debts on this boat or
owner." Exhibit B, Motion for Summary Judgment. The
plaintiffs, through their vice president, Robert Luttrell,
admitted receiving the notice, although Mr. Luttrell himself
did not see it until sometime in March, 1967. Luttrell
Deposition, at 41. On January 27, 1967, Rivermen Associated
notified the defendant Calumet that there were three claims
outstanding, totaling approximately $5,500. The claimants were
located in Chicago, Houston, and St. Louis. On February 3,
1967, the defendant Calumet made a check of the Abstract of
Title of the M/V Linda Brooks at the United States Custom
House in Chicago, and found no liens except a preferred
mortgage which was released the same day. The sale was
consummated on February 3, 1967, and a fund of $6,500 was set
aside for the satisfaction of claims. Between February 20 and
February 24, 1967, defendant Calumet published daily notice of
a change of vessel from the M/V Linda Brooks to the M/V Eddie
B. The $6,500 fund was available at this time. The first time
the defendant Calumet received notice of plaintiffs' claims
was on April 21, 1967, when plaintiffs' Houston attorneys
called defendant Calumet's attorney. This suit was filed on
July 20, 1967. A default judgment in the amount of $3,993 was
entered against defendant Brooks on June 5, 1968. This
judgment is apparently still unsatisfied.
The question that this court has before it is whether upon
these undisputed facts the plaintiffs were guilty of laches.
In cases involving maritime liens on a vessel sold to a
purchaser for value, a high degree of diligence is required in
enforcing these liens. The Everosa, 93 F.2d 732, 735 (1st Cir.
1937); Merchants & Marine Bank v. The Fishing Vessel T. E.
Welles, 289 F.2d 188, 190 (5th Cir. 1961), and cases cited
therein. Although this court is not bound by any state statute
of limitations, the fact that a state statute bars the cause
of action can be considered when the equitable defense of
laches is asserted. Phelps v. The Cecelia Ann, 199 F.2d 627,
628 (4th Cir. 1952). The transactions giving rise to this
cause of action occurred in Memphis, Tennessee, and there is
no question that Tennessee law and not Illinois law would
apply. Cf. Ill.Rev.Stat. 1967, ch. 83, § 21. Tennessee gives
lienholders three months to execute on their claim, after which
time the lien expires. Tennessee Code § 64-1904. Since the last
sale took place on June 9, 1966, Tennessee law barred the claim
as of September 10, 1966.
Another factor that this court may consider in determining
whether there was laches is the fact that the
plaintiffs did not file a notice of their claim in the port of
documentation (Chicago) as set forth in 46 U.S.C. § 921 et seq.
In addition, the plaintiffs disregarded a notice from Rivermen
Associated, and also missed three opportunities to arrest the
vessel, even though they knew that defendant Brooks was several
months in default. To hold the purchaser under these
circumstances would, in this court's opinion, be inequitable.
The plaintiffs, therefore, were guilty of laches.
It is therefore ordered that defendant Calumet Marine Towing
Corporation's motion for summary judgment be, and it is hereby
granted, with costs.
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