Les Northup Boat Repair v O/S Holly [1989] MHSC 27; 1 MILR (Rev) 176 (2 October 1989)

1 MILR (Rev.) 176

IN THE SUPREME COURT
REPUBLIC OF THE MARSHALL ISLANDS

S.Ct. CIVIL NO. 83-03
(High Ct. Civil Nos. 1982-052, 1982-052A, 1982-056 through 065, and Consolidated Cases)

LES NORTHUP BOAT REPAIR, QUALITY REFRIGERATION CO., INC. and LOS ANGELES MARINE HARDWARE, INC.,
Plaintiffs-Appellants,

-v-

O/S HOLLY ELAINE, O/S JUDE, et al.,
Defendants-Appellees,

and

ORANGE PRODUCTION CREDIT ASSOCIATION,
Plaintiff-Appellee,

-v-

O/S HOLLY ELAINE, O/S JUDE, et al.,
Defendants-Appellees.

APPEAL FROM THE HIGH COURT

OCTOBER 2, 1989

ASHFORD, C.J.
KONDO, A.J., and PHILIPPO, A.J. (sitting by designation)

SUMMARY:

In appeals by parties claiming liens against U.S. documented ships, the Supreme Court ruled that the substitution of one person for another as mortgagor did not affect the priority of the mortgage lien. The Court also declined to upset the trial court's ruling that one lien was lost by failure to timely enforce it. Lastly, the Court affirmed the trial court's allocation of costs among claimants, except as to one lienor, whose share it ruled should have been charged against proceeds of sale of the ships.

DIGEST:

1. MORTGAGES – Construction and Operation – Substitution of New Mortgagor: A substitution of the primary obligor does not invalidate or necessarily subordinate the priority of the lien on the security.

2. APPEAL AND ERROR – Review – Questions of Fact: An appellate court must refrain from re-weighing the evidence and must make every reasonable presumption in favor of the trial court's decision.

3. MARITIME LIENS – Enforcement – Laches: Absence of a vessel from home waters operates to relieve the lienor, to some extent, from laches; but the question in each case against a subsequent owner who acquired in good faith and without notice is whether the high degree of diligence in the enforcement of lien rights has been shown.

4. MARITIME LIENS – Same – Same: Whether laches applies in a given case depends upon the circumstances of the case and is primarily addressed to the trial court's discretion.

5. MARITIME LIENS – Same – Allocation of Costs: Trial court has discretion to allocate wharfage charges and costs of government custody of vessels among lienor claimants and holders of mortgages as it thinks appropriate, but portion allocable to lienor who established a lien should be charged against proceeds of sale of the vessels.

OPINION OF THE COURT BY ASHFORD, C.J.