Application of salvage law and the law of finds to sunken shipwreck discoveries.

• Author: Wilder, Mark A.

Modern technology has made the location and retrieval of shipwrecks possible, but with the rise of statist attitudes in the United Nations, that may change

IN THE 1977 motion picture, The Deep, a young couple, while scuba diving in the Bahamas, discover an ampoule of morphine lying near an old World War II freighter. After befriending a local treasure salvor, the group endeavors to remove all the morphine ampoules from the wreck and destroy the drugs before they fall into the hands of a local bad guy. But the adventure deepens when an old grenade explodes, causing the "floor" of the wreck to collapse, revealing an 18th century Spanish vessel loaded with treasure. In the happy ending, which only Hollywood could create, the team recovers a booty of gold jewelry, the morphine is destroyed and the bad guys get their just comeuppance.

For the adventuresome, this film had a little bit of everything: beautiful scuba diving, treasure, danger, sharks and even voodoo. What it did not have was the probable litigation over ownership rights in the treasure.

LAW OF SALVAGE

Salvage has been defined as "service voluntarily rendered in relieving property from an impending peril at sea or other navigable waters by those under no legal obligation to do so."(1) The law of marine salvage has as its origins the sea laws of Byzantium and the Mediterranean seaport cities,(2) and its earliest roots can be traced to the Rhodian era, 900 years before the Christian era. Rhodian laws were the first to allow a salvor to claim a reward based on a percentage of the cargo or ship recovered and the danger involved in the operation. Awards varied from 10 percent for cargo washed ashore to between 33 and 50 percent for recovered cargo, based on the depth of a shipwreck.

The law of salvage has three areas: property salvage, life salvage, and treasure salvage, the last being the focus of this article. In 1869 in The Blackwall,(3) the U.S. Supreme Court set forth the basic principles of maritime salvage, including the principle that a salvor's efforts need to be successful in order to recover a reward, which is known as the "no cure, no pay" principle in contract salvage. The Court stated:

Salvage is the compensation allowed to persons by whose assistance a ship or her cargo has been saved, in whole or in part, from impending peril on the sea, or in recovering such property from actual loss, as in the cases of shipwreck, derelict, or recapture. Success is essential to the claim; as if the property is not saved, or if it perish, or in case of capture if it is not retaken, no compensation can be allowed.(4) The Court stated that providing compensation in the maritime context is consonant with the public policy of encouraging rescues at sea:

Compensation as salvage is not viewed by the admiralty courts merely as pay, on the principle of a quantum meruit, ... but as a reward for perilous services, voluntarily rendered, and as an inducement to seamen and others to embark in such undertakings to save life and property. Public policy encourages the hardy and adventurous mariner to engage in these laborious and sometimes dangerous enterprises, and with a view to withdraw him every temptation to embezzlement and dishonesty, the law allows him, in case he is successful, a liberal compensation.(5) The Blackwall is often cited for the factors relevant in determining the amount of a salvage award, echoing the factors first established during the Rhodian period:

(1.) [t]he labor expended by the salvors in rendering the salvage service; (2.) [t]he promptitude, skill, and energy displayed in rendering the service and saving the property; (3.) [t]he value of the property employed by the salvors in rendering the service, and the danger to which such property was exposed; (4.) [t]he risk incurred by the salvors in securing the property from the impending peril; (5.) [t]he value of the property saved; (6.) [t]he degree of danger from which the property was rescued.(6) LAW OF FINDS

The focus of salvage law is on the right to compensation for one's successful efforts, not title to the property. Title is presumed to still exist in the original owner. In contrast, the object of the law of finds is to vest title in the person who reduces abandoned property to his possession.

The law of finds has its root in the common law in cases such as Armory v. Delamire(7) and Pierson v. Post.(8) In Armory, a 12th century case, a chimney sweep who found an apparently lost jewel was held by the English court to have title superior to all others except the true owner. In 1805 in Pierson, a New York court denied a hunter's claimed right to a fox, holding that mere pursuit of the animal did not vest title to it. Title was given to a second hunter who intervened and actually reduced the fox to his possession.

Application of the law of finds "necessarily assumes that the property involved was never owned or was abandoned,"(9) and therefore the "ancient and honorable principle of `finders, keepers' applies."(10)

The common law doctrine of finds law is available to a plaintiff in admiralty court under the "savings to suitors" clause of the Judiciary Act of 1789, which preserves the common law remedy. Thus, a plaintiff is permitted to plead both salvage law and the law of finds, so that if the court denies finds, salvage law can serve as a backup.(11)

LAW OF SALVAGE V. LAW OF FINDS

Once an admiralty court establishes jurisdiction, the next step is to decide whether the law of salvage or the law of finds applies. This inquiry ultimately requires examination of the particular facts and circumstances of each case. The key issue is whether the owner of the vessel--or an insurer that asserts ownership through subrogation--has abandoned the wreck and its cargo. Plaintiffs seeking title to a wreck or a preliminary injunction for sole exploration rights usually describe the vessel as "wrecked and abandoned."(12)

Abandonment in the maritime salvage context has been defined as the "act of leaving or deserting such property by those who were in charge of it, without hope on their part of recovering it and without the intention of returning to it."(13) However, the mere fact that property is lost at sea does not divest the owner of title.(14)

As a general principle, an admiralty court will favor salvage law over the law of finds because salvage law is more supportive of the public policy issues of preservation of maritime property and return of distressed property to a use beneficial to society. As a result, the law of finds applies in only two situations: "(1) where the owners have expressly and publicly abandoned their property; and (2) where items are recovered from an ancient shipwreck and no one comes forward to claim them."(15)

1. Cases Applying Law of Finds

   According to one writer,(16) Eads v. Brazelton(17) was the first U.S. maritime case in which the law of finds was applied to a sunken shipwreck. Eads involved the steamboat America, which sank in the Mississippi River between Tennessee and Arkansas in 1827 with a load of approximately 3,000 lead "pigs," shot and bars. In the two weeks after the sinking, the owners of the America salvaged animal furs, U.S. property, the ship's boilers and machinery, and a portion of the lead. However, the majority of the lead pigs and bars were left.

   Two years later, an island formed over the wreck large enough to support a stand of trees 30 to 40 feet tall. The island lasted for about 20 years before being washed away by the river.

   In 1855, Brazelton attempted to salvage the remaining lead, but he was drawn away from the wreck site on other business and mechanical problems. Before he left the site, however, he placed a buoy marking the sunken vessel and also marked trees along the shoreline to enable him to find the wreck in the event the buoy was washed away. About eight months later, Eads, a rival salvor, began salvaging operations and recovered a load of lead.

   Despite a preliminary injunction awarded to Brazelton preventing Eads from further salvaging operations, Eads returned to the wreck site alongside Brazelton and continued his recovery efforts. The trial court fined Eads $1,000, which was paid to Brazelton as compensatory damages, and Eads appealed.

   The Supreme Court of Arkansas was faced with two issues--had the America been abandoned and did Brazelton's marking of the wreck constitute possession of the wreck. The court held that the vessel had been abandoned, but that possession was lacking. Possession, the court held, requires an actual taking with the "intent to reduce it to possession." The court stated that constructive possession would have been found had Brazelton placed his boat over the wreck with the intent and ability to raise the cargo, as this would give rival salvors notice of possession and intent to salvage.

   Brady v. Steamship African Queen dealt with which of two rival salvors were to be granted title to shipwrecked property.(18) In 1958, the African Queen ran aground off the coast of Maryland. The ship split in two, the stem section exposed on a shoal, while the bow floated some distance away. One salvor named Warner claimed title to the stem section, alleging that he boarded this portion of the vessel, posted notice of his claim on the vessel, and published notice in a newspaper asserting his legal rights.

   However, a rival salvor, collectively named Brady, was found by the court to have performed all the incidents necessary for a successful salvage claim. Brady had boarded the stern section and remained aboard for more than six months before eventually successfully towing the stern section to port. Abandonment was not an issue because the owner and its underwriters had affirmatively abandoned the vessel. In addition, the salvage services far outweighed the value of the stern section recovered.

   Considering these facts, the federal district court found it unnecessary to resolve the competing claims through a salvage or...