Jurists have found it hard to define admiralty jurisdiction. The nature of the cause at issue determines admiralty jurisdiction. Admiralty jurisdiction exists when the cause involved is an admiralty or maritime matter. The scope and extend of admiralty jurisdiction has to be understood by considering the U. S. Constitution, the laws of Congress, and the decisions of the Supreme Court. Even though applicable legislation governs admiralty jurisdiction, a question over the scope of admiralty jurisdiction is to be determined by the Federal Court and finally analyzed by the Supreme Court.
The extent of admiralty jurisdiction changes with the change in conditions and development of laws. Abandonment of admiralty jurisdiction limited to tidewater can be taken as an example for the change of scope of admiralty jurisdiction to cope up with time.
In Detroit Trust Co. v. The Thomas Barlum, 293 U.S. 21 (U.S. 1934), a review of the judgment of the United States Circuit Court of Appeals for the Second Circuit was sought by the Petitioner mortgagee.
The district court had ruled that petitioner’s two suits in admiralty to foreclose two mortgages on respondent mortgagor’s ships that purported to be preferred mortgages under the Ship Mortgage Act were without admiralty jurisdiction and should have been dismissed. According to the respondent, there was no admiralty jurisdiction because the mortgages did not have any connection with maritime purposes. The district court ruled in favor of petitioner and entered decrees of foreclosure and sale. However, the court of appeals reversed the decision. It stated that the lower court had jurisdiction because the statute was applicable to the mortgage because the Ship Mortgage Act did not require the application of the proceeds for loans which such mortgages secured to any particular purpose. It was further held that Congress had the authority to increase the extent of admiralty jurisdiction because the encouragement of investment in shipping and shipping securities was an essential prerogative of Congress in the exercise of its wide discretion over the appropriate development of American maritime law.