Source: https://supreme.justia.com/cases/federal/us/292/20/
Timestamp: 2019-04-20 10:35:37+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 292 › Larsen v. Northland Transportation Co.
Larsen v. Northland Transportation Co.
1. When sued for damages in a state court, a shipowner is not obliged to submit to that court his claim for limitation of liability even when there is only one owner and one claim against him. P. 292 U. S. 23.
2. The right to limit liability is not waived by failing to set it up in a state court. Id.
3. Statutory provisions for limitation of liability should be construed liberally to effectuate their purpose. P. 292 U. S. 24.
4. A judgment is not conclusive of those matters as to which a party had the option to litigate but did not in fact do so. P. 292 U. S. 25.
Certiorari, 290 U.S. 624, to review the reversal of a decree dismissing a petition to limit liability.
For personal injuries negligently inflicted, petitioner Larsen sought judgment in the superior court, King county, Wash., against respondent transportation company, alleged owner and operator of motor ship Norco. The complaint contained no reference to other claimants or creditors. The company made general denial; also set up contributory negligence and assumption of risk. It said nothing concerning any other creditor or claimant or desire to limit liability.
After verdict, September 22, 1932, judgment for $12,500 against the company followed, October 1. It then petitioned the United States District Court for limitation of liability. The petition recited the circumstances leading to the judgment, prayed for an appraisement of the company's interest as charterer and the pending freight, monition against all persons claiming damages, an appropriate decree.
Larsen moved to dismiss this petition because: the facts alleged are not sufficient.
the advantage and benefit of the limitation of liability statute by proper pleading in the action which has been determined in the Superior Court of the Washington for King County. . . . The petitioner failed and refused to claim the advantage and benefit of the limitation of liability statute, in said Superior Court of the Washington, and thereby waived its right to claim and obtain the advantage and benefit of said statute."
Langnes v. Green, 282 U. S. 531, and Ex parte Green, 286 U. S. 437, were misconstrued; it was wrongly held that the District Court, sitting in admiralty, has exclusive jurisdiction to determine all questions involved in a proceeding for the limitation of liability where there is only one claimant and only one owner, and where the owner's right to limit liability is not disputed. It was wrongly held that the state court had no jurisdiction to entertain the claim of the shipowner for limitation of liability where there is only one claimant and only one owner, and where the owner's right to limit liability was not disputed. Also that, in such cases, the shipowner was under no obligation to submit his claim to limited liability to the state court, and the judgment of the state court was not res judicata as to all issues which might have been submitted for its decision.
obligatory upon it to claim such limitation there, and, after judgment for damages, the right remained to institute limitation proceedings in the federal court. But those opinions have affirmed another view, and clearly establish that the state court had jurisdiction and was competent finally to consider all necessary facts and limit the liability. Consequently, after the adverse judgment, respondent could not seek limitation elsewhere; it was bound to present the whole matter to the state court.
We think it true to say that, before Langnes v. Green and Ex parte Green, the commonly approved doctrine permitted a shipowner, even when there was only one claimant, to seek limitation of liability in a federal court after judgment against him for damages by a state court. And, unless those cases are to the contrary, that rule must apply here. White v. Island Transp. Co., 233 U. S. 346; In re East River Co., 266 U. S. 355; The S.A. McCaulley, 99 F. 302; In re Old Dominion S.S. Co., 115 F. 845; Glenson v. Duffy, 116 F. 298; The Ocean Spray, 117 F. 971; In re Starin, 124 F. 101; The City of Boston, 159 F. 257; The Hoffmans, 171 F. 455; In re P. Sanford Ross, 196 F. 921; Monongahela River Consol. Co. v. Hurst, 200 F. 711; Hughes on Admiralty, § 172; Benedict on Admiralty (4th ed.) § 520.
the federal court properly enjoined further proceedings. Neither of these causes supports the suggestion that, when sued for damages in a state court, a shipowner must at his peril claim limitation of liability in that suit.
"Petitioner asked an instruction that § 4283 of the Revised Statutes applied, and that, under it, the verdict could not exceed the value of the vessel. In a state court, when there is only one possible claimant and one owner, the advantage of this section may be obtained by proper pleading. The Lotta, 150 F. 219, 222; Delaware River Ferry Co. v. Amos, 179 F. 756. Here, the privilege was not set up or claimed in the answer, and it could not be first presented upon request for a charge to the jury."
This lends no support to the view that, sued in a state court for damages, the shipowner must set up his claim for limitation; otherwise it is waived.
Statutory provisions for limitation of liability should be construed liberally in order to effectuate their beneficent purposes. Providence & N.Y. S.S. Co. v. Hill Mfg. Co., 109 U. S. 578, 109 U. S. 588; Butler v. Boston & Savannah S.S. Co., 130 U. S. 527, 130 U. S. 549-550; La Bourgogne, 210 U. S. 95, 210 U. S. 121; Capitol Transportation Co. v. Cambria Steel Co., 249 U. S. 334; Evansville & B. G. Packet Co. v. Chero Cola Bottling Co., 271 U. S. 19, 271 U. S. 21; Hartford Acc. & Indemnity Co. v. Southern Pacific Co., 273 U. S. 207, 273 U. S. 214; Flink v. Paladini, 279 U. S. 59. This view does not harmonize with the suggestion that, to obtain limitation, a shipowner must initiate steps to that end before any liability has been made to appear. The Benefactor, 103 U. S. 239. While, in certain circumstances, the shipowner may ask limitation in the state court, he is not compelled so to do.
Here, the shipowner recognized the judgment, said nothing against its validity. The proceedings in the two courts looked towards entirely different ends.
The established rule in this Court is that if, in a second action between the same parties, a claim or demand different from the one sued upon in the prior action is presented, then the judgment in the former cause is an estoppel "only as to those matters in issue or points controverted, upon the determination of which the finding or verdict was rendered." Bates v. Bodie, 245 U. S. 520, 245 U. S. 526; United States v. Moser, 266 U. S. 236, 266 U. S. 241; United Shoe Machinery Corp. v. United States, 258 U. S. 451, 258 U. S. 458.
"While a defendant must bring forward all purely defensive matter, he is not barred by a former judgment against him as to any matter which he was not bound to present and which was not in fact litigated. A judgment is not conclusive of those matters as to which a party had the option to, but did not in fact, put in litigation in the action."
Freeman on Judgments, 5th ed., § 786.

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