Enforcement of Mortgages and Liens

A ship mortgage is the pledging and charge upon title of a ship and its machinery as security for a loan.  A preferred mortgage is a lien on the mortgaged vessel in the amount of the outstanding mortgage indebtedness secured by the vessel.[i] There will be no suit for foreclosure in a state court if it is a preferred mortgage, and, there will be no suit for foreclosure in an admiralty court if it is not a preferred mortgage.[ii]

An ordinary mortgage of vessel is not regarded as a maritime contract.  Thus, a court of admiralty has no jurisdiction of a libel to foreclose it.[iii] If a mortgage covers a vessel and an also an additional property that is not a vessel, then it will not authorize a civil action in rem to enforce the rights of the mortgagee under the mortgage against that additional property which is not a vessel.[iv]

A maritime lien is a lien that attaches to a ship and its cargo.  Common law remedies are not applicable to enforce a maritime lien by a proceeding in rem, and the original jurisdiction to enforce a lien in rem will be exclusive in the federal district courts.  Similarly, they do not confer any jurisdiction upon a state court to enforce such a lien by a suit or proceeding in rem.  For causes of action not cognizable in admiralty, the States can not only grant liens, but can also provide remedies for their enforcement.[v]

[i] 46 USCS § 31325

[ii] Detroit Trust Co. v. The Thomas Barlum, 293 U.S. 21 (U.S. 1934)

[iii] The Oconee, 280 F. 927, 930 (D. Va. 1922)

[iv] 46 USCS § 31303

[v] The Robert W. Parsons, 191 U.S. 17 (U.S. 1903)


Inside Enforcement of Mortgages and Liens