## Facts

- The *Wild Turkey* was a fishing vessel owned by Wild Turkey, Inc. (the company).
- Pee Dee State Bank (the bank) held a ship mortgage on the *Wild Turkey*.
- The company defaulted on the mortgage.
- The bank filed a ship-mortgage foreclosure action in the United States District Court for the District of South Carolina:
  - in rem against the *Wild Turkey*; and
  - in personam against the company.
- When the action was initiated, the *Wild Turkey* was berthed at Marsh Harbor Marina, which the bank mistakenly believed was in South Carolina.
- Marsh Harbor Marina was actually located a few yards across the state line in North Carolina.
- Relying on a nonjudicial repossession right in the mortgage terms, the bank took physical custody of the *Wild Turkey* and moved it to a marina in South Carolina.
- After the vessel was moved into South Carolina, it was arrested pursuant to federal admiralty rules.
- The company moved to dismiss, arguing the court lacked in rem jurisdiction because the vessel was in North Carolina when the action was brought and the seizure was invalid.
- The bank requested an interlocutory sale of the *Wild Turkey*.

## Issues

1. Whether the district court lacked in rem admiralty jurisdiction over the *Wild Turkey* because the vessel was outside the district when the foreclosure action was initiated, even though it was later brought into the district and arrested there.
2. Whether the court should order an interlocutory sale of the arrested vessel during the foreclosure proceedings.

## Decision

- The court denied the company’s motion to dismiss for lack of in rem jurisdiction.
- The court held that in rem jurisdiction attached once the vessel was within the district and was validly arrested under admiralty process.
- The court granted the bank’s request for an interlocutory sale of the *Wild Turkey*.

## Legal Principles

- In rem admiralty jurisdiction over a vessel is obtained by arrest of the res within the court’s territorial jurisdiction; filing a complaint does not by itself create in rem control over property located outside the district.
- A mortgagee’s contractual, nonjudicial repossession and movement of a vessel into the district does not defeat the court’s ability to obtain in rem jurisdiction through a later arrest that complies with the admiralty rules.
- In a ship-mortgage foreclosure, a court may order an interlocutory sale of an arrested vessel when appropriate to avoid deterioration and excessive custodial expense, with claims shifting to the sale proceeds.

## Conclusion

In *Pee Dee State Bank v. The Wild Turkey*, the court allowed the ship-mortgage foreclosure to proceed in rem because jurisdiction attached when the *Wild Turkey* was brought into the district and arrested under admiralty process, and it ordered an interlocutory sale to convert the vessel into a fund subject to the court’s control.


Pee Dee State Bank v. The Wild Turkey, 1992 AMC 1896 (1991)