Source: https://supreme.justia.com/cases/federal/us/118/520/
Timestamp: 2019-04-19 09:12:58+00:00

Document:
The decision in The City of Norwich, ante 118 U. S. 468, in relation to the time when the value of the owner's interest in the ship is to be taken for fixing the amount of his liability, applied to a case where the offending ship did not sink in consequence of the collision, but was afterwards sunk and wrecked in the same voyage by the negligent navigation of those in charge of her, this sinking being held to be the termination of the voyage.
The decision in the same case as to insurance repeated.
Limited liability may be claimed 1st, merely by way of defense to an action, or 2d, by surrendering the ship or paying her value into court. The latter method is only necessary when the shipowner desires to bring all the credit ors claiming damage into concourse for distribution.
others, and bound to New York. The Daphne was injured about $7,000 worth, and the court below found that the Great Western was in fault, and was worth $150,000, both before and immediately after the collision; but that after the collision, and on the same day, the steamer, while still on her voyage to New York, was stranded and wrecked on the south coast of Long Island by the careless navigation and fault of those in charge of her, and from no cause connected with the collision. No freight was received by her owners. On the 29th of March, they abandoned her to the underwriters and received from them insurance to the amount of 34,000 as for a total loss. After this, the wreck and materials saved were sold for account of the underwriters and by direction of the owners, and realized $1,796.14. On the 27th of March, 1876, the libel was filed in this case on account of the owners of the Daphne, and Whitwill, the respondent, appeared and answered, denying that the Great Western was in fault and claiming that if she should be found in fault, the owner's liability was limited to the amount or value of his interest in the vessel and her freight, and that this interest was of no value whatever, and to this he added, by leave of the court during the trial, the following words: "And he hereby surrenders the same to the libellants." He also, during the trial, tendered an assignment of his interest to the libellants, and offered to give another assignment to a trustee for the benefit of the libellants under § 4285 of the Revised Statutes of the United States. The court below held that the owners of the Great Western were only liable for the proceeds of the wreck, amounting to $1,796.14, and gave a decree for that amount and interest, and for the costs of the libellants in the district court.
First. That the limitation of the respondent's liability to the value of the ship and freight in the condition in which they were after the stranding and wreck is contrary to the rule contained in § 4283 of the Revised Statutes.
ship liable to be surrendered in order to obtain a limitation of liability, and was not taken into account in fixing the measure of such liability.
Thirdly. Because the court allowed the respondent to amend his answer by the words "and he hereby surrenders the same to the libellants," and permitted him to give in evidence his written surrender of his interest in the steamer to the libellants, and his offer to make a like surrender to a trustee for the benefit of the defendants.
Fourthly. Because without proof that the laws of Sweden and Great Britain are the same on the subject, the only law applicable to the case was the law of the forum, of which the general admiralty law forms no part.
The points raised in the first and second assignments have been already discussed and decided in the case of The City of Norwich, ante, 118 U. S. 468. There is nothing peculiar in the present case, unless it be that the Great Western was not sunk or wrecked by means of the collision, but afterwards, by the carelessness of her master or crew. This can make no difference. We showed in the opinion referred to that the termination of the voyage is the point of time at which the value of the offending vessel is to be taken. The voyage in the present case was not terminated until the vessel was sunk and stranded on the Long Island coast. The carelessness of the master and crew cannot vary the result. It is against their faults and negligence that the law was intended to protect the ship owner, provided the loss and damage sustained were caused without his privity or knowledge.
freight at the termination of the voyage. He did not need to make any surrender or attempt at a surrender. A surrender of the vessel, or payment of her proceeds or value into court, would have been necessary in order to bring other creditors into concourse with the libellants, but for the mere defense of that cause, it was not necessary. This disposes of the supposed difficulty in making an abandonment to the libellants after a surrender of abandonment to the insurers -- a difficulty which we have already shown to be groundless in the opinion referred to.
The fourth assignment of error is not well taken, because the case was altogether decided according to the maritime law of this country, which is the law of the forum.
MR. JUSTICE MATTHEWS, with whom concurred MR. JUSTICE MILLER, MR. JUSTICE HARLAN, and MR. JUSTICE GRAY, dissenting.
MR. JUSTICE MILLER, MR. JUSTICE HARLAN, MR. JUSTICE GRAY, and myself are unable to concur in the opinion and judgment of the Court in the three cases just disposed of. The importance of the question decided justifies a statement of the grounds of this dissent.
The principal question, stated generally, involved in all the cases is whether, under §§ 4282 to 4285, inclusive, of the Revised Statutes, being reenactments of §§ 1, 3, and 4 of the Act of March 3, 1851, limiting the liability of ship owners so that for the losses specified it shall not in any case exceed the amount or value of the interest of such owner in such vessel and her freight then pending, that value shall be estimated as including or excluding any sum received or receivable by the ship owner on account of insurance upon his interest in the vessel or freight.
differ in some important particulars, a consideration of which will throw light upon the principle according to which it is to be determined.
The case of The Scotland (Dyer v. National Steam Nav. Co.) was a libel in personam in a cause of collision, for the loss of the ship Kate Dyer, run down on the high seas by the fault of the steamship Scotland, of which the respondents were owners. A former appeal in the same case, decided by this Court, is found reported under the name of The Scotland, 105 U. S. 24. The Kate Dyer was sunk immediately, and the steamship Scotland sunk soon after, from the effects of the collision, and was a total loss, a portion of the wreck being saved. It was held on the former hearing that the respondents were entitled to the benefits of the statute limiting their liability. The decree for the several libellants amounts in the aggregate to $255,047.70. It is also found that the Scotland, at the time of the collision was worth £100,000, was insured to the amount of £63,500, and that within nine months after the collision the respondents had received the amount thereof, equal to $299,867.42; but that the value of the articles saved from the wreck is the sum of $4,927.85, which the decree ascertains to be the amount for which alone the respondents are liable.
who had insured her to the amount of £34,000, which was paid by them to the owners as a total loss. There was saved from the wreck materials which, on sale, realized to the owners $1,796.14. The decree limited the liability of the respondents to this amount.
Connecticut, and after, the decrees in the District Court for the Eastern District of New York in the proceedings in rem, the owners of the steamboat, the present appellees, filed their petition in the last-named court, praying for the benefit of the act limiting their liability. Such proceedings were thereupon had that an appraisement was made of the value of the steamboat in the condition and situation in which she was after the collision, and before she was raised, and it was found to be $2,500; being the difference between $25,000, her value when raised, and $22,500, the amount expended in raising her. A decree was finally entered in the circuit court, on appeal, limiting the liability of the appellees to this amount, and it was distributed among the libellants, after refunding to the appellees $1,008.41, part thereof, for their costs in the litigation. The decree thereupon also perpetually enjoined all the libellants who had obtained decrees in their favor in the suits in rem in the Eastern District of New York from the enforcement of those decrees, and thus deprived them of their right to recover against the stipulators, who had filed a stipulation in the sum of $70,000 to answer the decrees in those causes. So that in these cases the owners are exonerated from all personal liability in excess of the sum of $2,500, but have received back their vessel free and discharged from all liens established by the decrees against her in rem in the Eastern District of New York. It is also found as a fact that when the collision occurred the steamboat was insured against fire, but not against marine disaster, and of the insurance money the appellees have recovered and received from the underwriters the sum of $49,283.07.
against them, to the amount of over $26,000, on payment of less than $2,000. The question is whether these results can be justified by a reasonable interpretation of the law limiting the liability of ship owners.
"The owner is bound civilly for all delinquencies committed by the captain within the scope of his authority, but he may discharge himself therefrom by abandoning the ship and freight, and if they are lost, it suffices for his discharge to surrender all claims in respect of the ship and its freight,"
"The same general doctrine is laid down by many other writers on maritime law, so that it is evident that by this law the owner's liability was coextensive with his interest in the vessel and its freight, and ceased by his abandonment and surrender of these to the parties sustaining loss."
"was to give to British shipping all the protection which the navigation of some foreign states extended to theirs, and this protection goes to the extent of permitting the owners at the end of the voyage, to give up the vessel in its then state, by way of satisfaction to the parties injured, and if it be lost, the owners are altogether exempt, on abandoning the benefit of insurance, if any, and salvage."
If, now, on a more critical and extended inquiry into the maritime law of the modern states of continental Europe, it should appear that the opinion of Pardessus, as quoted in the case above cited, was not universally accepted, and that the codes and commentators of various of those states differ in their legislation and interpretation of the general maritime law on the subject, it would not necessarily follow that Congress, in passing the act of 1851, may not have intended to adopt the rule as stated by Pardessus, and those who agreed with him, rather than that now insisted on as more generally prevailing.
"The Roman law, which held the owner absolutely liable, with all his property, is nowhere put in practice, and was not current as early as the Middle Ages. Indeed, the Consulate of the Sea, cc. 183, 224, 236; the law of Wisbuy, reasoning from Arts. 13 and 68; that of the Hanse Towns, reasoning from article 2, Title X, render the owners, as a rule, answerable only to the extent of the ship's value, and the modern maritime laws free the owners, by the abandon of the ship and their several shares in the vessel, from all further liability for the ship enterprise, particularly for the acts and contracts of the captain. In the ship are included all gains arising during the voyage, as well as the insurance. Should the ship and the freight have perished, it is sufficient for exoneration of the owners if all claims and causes of action having reference to the vessel and freight are abandoned by them."
This was the law of Prussia in 1851, when the act of Congress of that year on the subject was passed, and continued to be so until March 1, 1862, when the Prussian Code was superseded by that of the Germanic Confederation, which omitted any provision on the subject, overruling the proposals of the Prussian delegates to the contrary.
ship owner to limit his liability, but, on the contrary, the argument is strong, if not convincing, from the examples of European codes, that it would require express language to effect that exclusion, if such was the intention.
But whatever bearing the foreign law may be thought to have upon the meaning of the statute, it is clear that the latter must be interpreted in the light of the antecedent domestic law which it modified and displaced. What that was is not a matter of dispute.
The passage of the Act of March 3, 1851, was no doubt due to the decision of this Court in the case of New Jersey Steam Navigation Co. v. Merchants' Bank, 6 How. 343, where it was held that in admiralty, as at common law, the owners of a steamboat were liable in personam for the loss by fire of specie carried by their boat, notwithstanding a contract of exemption, the loss having occurred from want of ordinary care on the part of those engaged in the navigation of the vessel.
Accordingly, it was provided, in the first section of the Act of March 3, 1851, that owners of vessels should not be liable for losses by fire, of goods carried by them, unless such fire was caused by the design or neglect of the owner himself, with a proviso, now omitted from the corresponding § 4282 of the Revised Statutes, that the parties, nevertheless, might extend or limit the liability of ship owners by "making such contract as they please."
A reference to the debates in Congress upon the bill during its progress will show that this was the only provision which excited any comment, and while allusion was made to English legislation on the subject of limiting the liability of ship owners, and to the statutes of Massachusetts and Maine on the same subject, there was no mention whatever made of any supposed rule of general maritime law prevailing on the subject in continental Europe, and no explanation of the expected operation and effect of the provision fixing the limit of liability at the value of the interest of the owner in the ship and freight, and of the effect of a surrender of the vessel and freight in exonerating the ship owner from any recovery beyond that limit.
provided by the existing law of admiralty jurisdiction a remedy against the vessel itself in rem when it could be seized, and the alternative remedy in personam against the owners. There was no limit to their liability, but, as in other cases of personal liability, all property of the defendants was subject to process in payment of the judgment or decree. The procedure in rem has for its object the enforcement of a liability which by the maritime law is a lien upon the vessel, which is a jus in re, and is treated as a proprietary right, capable of being realized by judicial process. Ward v. Chamberlain, 2 Black 430; Vandewater v. Mills, 19 How. 82; The Lottawanna, 21 Wall. 558. And in cases of torts, as well as in many cases of contract, where the general owner has entrusted a special owner or charterer with authority to bind the ship, but not himself, the vessel is treated by the maritime law as an actor and juridical person, capable of committing wrongs, and is pursued as a delinquent without regard to ownership or agency. The China, 7 Wall. 53; Malek Adhel, 2 How. 210. And when the liability is not only a lien on the vessel, but a claim against the owner personally, if satisfaction is not secured by process in rem, the deficiency may be made good by proceedings in personam.
out in the law, there shall be no recovery against them personally in excess of the value of their interest in the ship and freight. The act only operates as a limitation upon the personal liability of the owners, as distinguished from the liability of the offending vessel itself.
This seems to us very clear, and yet, in the case of The City of Norwich, the libellants have been perpetually enjoined from prosecuting their decrees actually obtained against the steamboat City of Norwich, because the owners have obtained under the statute a release from their personal liability on account of its wrong. It is not to the purpose to say that, in a proceeding against the vessel, its appraisement included the cost of raising and repairs put upon it by the owners, which ought not to have been included, for that is a question which could only properly have been litigated in the case in which the decree complained of was rendered. Besides, it is difficult to see on what grounds an owner can rightfully complain, who has voluntarily raised his sunken vessel and repaired her, that those having maritime liens upon her seek to enforce them; or how he can claim, as against them, a prior or any lien on his own vessel for raising and repairing her. And we think it is quite plain that it was an error in the decree appealed from to deprive the libellants, who had obtained their decrees against the vessel, from prosecuting them to their legitimate results, when the whole force of the statute authorizing the proceeding is expended in a limitation of the recovery in suits against the owner in personam.
altogether superseded by the proceeding in rem, but only that it is restricted within certain expressed limits, on compliance with certain definite conditions. In all cases the owner must surrender the vessel and its pending freight, or their value, whereas, in many -- such as suits for pilotage and for damage by collision -- no process in rem against freight is given by the 14th and 15th rules in admiralty, such as is authorized by the 12th and 13th in suits by materialmen and for mariners' wages. So that the statute is not to be treated as if it confined the recovery of the party suffering loss strictly to what he might obtain by a proceeding in rem against the vessel alone. It therefore does not conclude the inquiry to say that, in a proceeding in rem against the vessel, the libellant had no lien which he could follow on any policies of insurance taken out by the owners, or the proceeds of any such when payable or paid. The question still recurs, what does the statute of Congress require the owner to give up or account for, as a condition of his release from personal liability for the loss and wrong suffered by the libellant?
For the same reason, it is irrelevant and immaterial to say that the policy of insurance, taken out by the owner on his interest in the ship or freight, is a contract of personal indemnity, collateral to his ownership, which does not pass by operation of law with a transfer of the title to the thing which is the subject of the insurance, and to the benefit of which those having liens on the thing are not entitled, in case of its loss, on the principle of subrogation. All that may be true; but, if it is, it nevertheless remains to ascertain whether, recognizing the owner's independent right to recover for his own use insurance accruing to him by the loss of its subject, the statute has not said that he shall not have the privilege of release and exoneration from his personal liability for injuries inflicted by his agents and representatives, except upon the condition, as a price for its purchase, that he shall voluntarily surrender, as the value of his interest in the vessel and freight, whatever they have procured for him of pecuniary advantage, including the insurance money recoverable for their loss.
"that it shall be deemed a sufficient compliance on the part of such owner with the requirements of this title . . . if he shall transfer his interest in such vessel and freight, for the benefit of such claimants, to a trustee; . . . from and after which transfer all claims and proceedings against the owner shall cease."
It was decided in the case of The Scotland, 105 U. S. 24, that it is not necessary that ship owners should surrender and transfer the ship in order to entitle them to the benefit of the law. That is only one mode of relief. In the alternative, they may retain their interest in the ship, abiding a decree for the value of the ship and freight as ascertained by the court upon the proofs. But this double method of executing the purpose of the statute does not imply and difference in the estimated amount of the possible recovery. The limit of that, in every case, is the value of the owner's interest in the ship and freight, and is the same whether he makes an actual transfer, or whether he submits himself personally to the payment of the ascertained amount.
interest to be transferred, is not to be held as excluding insurance because not expressly mentioned, for the reason that the mention of freight is sufficient to characterize the nature of the owner's interest to be valued, as including, not merely the material remnants of the broken or sunk vessel in specie, but as well that which it produces, and which is in truth her representative, and of which it is the meritorious cause and consideration; for the insurance is the price paid by the insurer to the insured as the purchase pro tanto of the thing insured, when damaged or lost, and, in the hands of the owner, or due to him, still remains as the value of an interest in the ship as that existed when damaged or lost, and ought to be accounted for as part of that value, as much so as freight paid, though no longer freight money in kind, must still be valued and accounted for by the owner who has received it. The insurance money is the interest of the owner in the ship reduced to money, and therefore most accurately measures its value; for, in cases of total loss, actual or constructive, all interest of the owner, even though it be a mere spes recuperandi, on payment of the insurance money, passes by operation of law to the insurer. Yet that very interest, thus the property, on abandonment or payment of a total loss, the title to which passes to the insurer, is the same interest the value of which, by the terms of the statute, must be decreed to the libellant to exonerate the owner from personal liability to any additional extent.
full compensation by way of insurance for the loss he has incurred, and has thus restored to him the offending vessel, not indeed in specie, but in value. It seems to us it is the meaning of the statute that the owner shall receive no pecuniary benefit from his interest in the vessel doing the wrong which shall not inure to the compensation of him who has suffered the loss which it has caused. And that meaning Congress has taken pains to express by the use of the word "interest" as the subject which, or the value of which, the owner must surrender and transfer or account for, as the price of his immunity from personal liability, because it is appropriate to convey the idea, being large enough to embrace, not the mere legal title to the vessel or the wreck and remnant of her which may be saved from the perils of the voyage, but every claim and benefit which constitutes to the owner its substance and value, capable of measurement in money.

References: § 4285
 § 4283
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 § 4282
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