Source: https://www.legalcrystal.com/case/99121/ryan-stevedoring-co-inc-vs-pan-atlantic-corp
Timestamp: 2016-12-02 20:48:56
Document Index: 100829695

Matched Legal Cases: ['§ 4', '§ 33', '§ 5', '§ 901', '§ 19', '§ 919', '§ 334', '§ 33', '§ 76', '§ 33', '§ 33', '§ 901']

Ryan Stevedoring Co Inc Vs Pan Atlantic Corp - Citation 99121 - Court Judgment | LegalCrystal
Save as PDF Add a Tag Add a Note Semantics Visualize Ryan Stevedoring Co., Inc. Vs. Pan-atlantic Corp. - Court Judgment	LegalCrystal Citationlegalcrystal.com/99121CourtUS Supreme CourtDecided OnJan-09-1956Case Number350 U.S. 124AppellantRyan Stevedoring Co., Inc.RespondentPan-atlantic Corp.Excerpt:
ryan stevedoring co., inc. v. pan-atlantic corp. - 350 u.s. 124 (1956)
without signing a formal stevedoring contract or an express indemnity agreement, a stevedoring contractor agreed to perform all stevedoring operations required by a shipowner in the latter's coastwise service. under this agreement, the contractor loaded a ship at georgetown, s.c., with a mixed..... Judgment:
on the shipowner's third-party complaint against the contractor, the shipowner was entitled to reimbursement from the contractor for the amount of the judgment against the shipowner. Pp.
350 U. S. 125
1. Section 5 of the Longshoremen's and Harbor Workers' Compensation Act, which provides that the liability of an employer prescribed in § 4 "shall be exclusive and in place of all other liability of such employer to the employee," does not preclude assertion by the shipowner of the contractor's contractual liability to it, though the contractor was also the employer of the injured longshoreman. Pp.
350 U. S. 128
2. Even in the absence of an express agreement of indemnity, the contractor was obligated to reimburse the shipowner for damages caused it by the contractor's breach of its contract to stow the cargo properly and safely. Pp.
350 U. S. 133
4. That the shipowner had an obligation to supervise the stowage and had a right to reject unsafe stowage and did not do so does not bar the shipowner's right to recover from the contractor any damage caused by the contractor's failure to stow the rolls safely. Pp.
This case presents two questions as to the liability of a stevedoring contractor to reimburse a shipowner for damages paid by the latter to one of the contractor's longshoremen on account of injuries received by him in the course of his employment on shipboard. 1. The first question is whether the Longshoremen's and Harbor Workers' Compensation Act [
] precludes a shipowner from asserting such a liability. 2. The second is whether the liability exists where a contractor, without entering into an express agreement of indemnity, contracts to perform a shipowner's stevedoring operations and the longshoreman's injuries are caused by the contractor's unsafe stowage of the ship's cargo. For the reasons hereafter stated, we answer the first question in the negative and the second in the affirmative.
In 1949, respondent, Pan-Atlantic Steamship Corporation, a Delaware corporation, operated the SS.
in the American coastwise trade under a bareboat charter. As evidenced by letters, but without a formal stevedoring contract or an express indemnity agreement, respondent secured, for that year, the agreement of petitioner, Ryan Stevedoring Co., inc., an Alabama corporation, to perform all stevedoring operations required by respondent in its coastwise service. Pursuant to that contract, petitioner loaded the
at Georgetown, South Carolina, with mixed cargo. This included pulpboard, such as is used in making corrugated paper and paper bags, shipped in rolls 4 feet wide and 3 to 5 feet long. Petitioner stowed some of these rolls side-by-side on the floor of Hatch No. 3 and "nested" others above them by placing the upper rolls in the troughs between the lower ones. To immobilize the rolls, it was necessary to secure or "chock" the bottom tier with wedges or with miscellaneous pieces of wood known as "dunnage." There is little evidence as to what took place when the rolls were stowed at Georgetown, but it was the uniform practice of petitioner's longshoremen to stow such cargo under the immediate direction of their hatch foreman, while respondent's cargo officers supervised the loading of the entire ship and had authority to reject unsafe stowage.
Petitioner's insurance carrier under the Longshoremen's Act paid Palazzolo $2,940 compensation and furnished him medical services costing $9,857.36, all without any formal award by the Deputy Commissioner. As permitted by § 33 of that Act, Palazzolo sued the respondent shipowner in the Supreme Court of New York. [
] He claimed that the unsafe stowage of the cargo, which caused his injuries, established either the unseaworthiness of the ship or the shipowner's negligence in failing to furnish him with a safe place to work, or both. The shipowner removed the case to the United States District Court for the Eastern District of New York and filed a third-party complaint against petitioner. By stipulation, Palazzolo's case against the shipowner was tried to a jury, which returned a verdict in his favor for $75,000.
Also by stipulation, the shipowner's third-party complaint was submitted on the same record to the judge who had presided over Palazzolo's case. He dismissed the complaint. 111 F.Supp. 505. The Court of Appeals affirmed Palazzolo's judgment, but reversed the dismissal of the third-party complaint and directed that judgment be entered for the shipowner. 211 F.2d 277. Petitioner, the stevedoring contractor, contends that the order reversing the dismissal of the impleader suit is erroneous. Because of the wide application of the case and the conflicting views that have been expressed on the issues, we granted certiorari. 349 U.S. 813. The United States filed a brief as
in support of the shipowner and took part in the oral argument. 348 U.S. 948. The judgment was affirmed by an equally divided Court, 349 U.S. 901, but the case was restored to the docket for reargument before a full Court, 349 U.S. 926.
"SEC. 5. The
prescribed in section 4 [for compensation]
shall be exclusive and in place of all other liability of such employer to the employee,
his legal representative, husband or wife,
parents, dependents, next of kin,
and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death,
except that if an employer fails to secure payment of compensation as required by this Act, an injured employee, or his legal representative in case death results from the injury, may elect to claim compensation under this Act, or to maintain an action at law or in admiralty for damages on account of such injury or death. . . ."
The obvious purpose of this provision is to make the statutory liability of an employer to contribute to its employee's compensation the exclusive liability
of such employer to its employee, or to anyone
claiming under or through such employee,
on account of his injury or death arising out of that employment.
In return, the employee, and those claiming under or through him, are given a substantial
in the form of an assured compensation, regardless of fault, as a substitute for their excluded claims. On the other hand, the Act prescribes no
for a shipowner that is compelled to pay a judgment obtained against it for the full amount of a longshoreman's damages. [
liability of the stevedoring contractor to its longshoreman, and to his kin, for damages on account of the longshoreman's injuries. At the same time, however, § 5 expressly preserves to each employee a right to recover damages against third persons. [
] It thus preserves the right, which Palazzolo has exercised, to recover damages from the shipowner in the present case. The Act nowhere expressly excludes or limits a shipowner's right, as a third person, to insure itself against such a liability either by a bond of indemnity, or the contractor's own agreement to save the shipowner harmless. Petitioner's agreement in the instant case amounts to the latter, for, as will be shown, it is a contractual undertaking to stow the cargo "with reasonable safety," and thus to save the shipowner harmless from petitioner's failure to do so.
latter's improper stowage of cargo causes an injury on shipboard to some one other than one of its employees. The coincidence that the loading contractor here happens to be the employer of the injured longshoreman makes no difference in principle. While the Compensation Act protects a stevedoring contractor from actions brought against it by its employee on account of the contractor's tortious conduct causing injury to the employee, the contractor has no logical ground for relief from the full consequences of its independent contractual obligation, voluntarily assumed to the shipowner, to load the cargo properly.
See American Stevedores v. Porello,
Crawford v. Pope & Talbot,
206 F.2d 784, 792-793;
Brown v. American-Hawaiian S.S. Co.,
211 F.2d 16;
Rich v. United States,
177 F.2d 688;
175 F.2d 329. [
owing to the shipowner
to stow the cargo in a reasonably safe manner. Accordingly, the shipowner's action for indemnity on that basis is not barred by the Compensation Act. [
upon contractual undertakings, would present the bald question whether the stevedoring contractor or the shipowner, because of their respective responsibilities for the unsafe stowage, should bear the ultimate burden of the injured longshoreman's judgment. That question has been widely discussed elsewhere in terms of the relative responsibility of the parties for the tort, and those discussions have dealt with concepts of primary and secondary or active and passive tortious conduct. [
] Because respondent in the instant case relies entirely upon petitioner's contractual obligation, we do not meet the question of a noncontractual right of indemnity or of the relation of the Compensation Act to such a right.
The shipowner's claim here also is not a claim for contribution from a joint tortfeasor. Consequently, the considerations which led to the decision in
, are not applicable.
See American Mutual Liability Ins. Co. v. Matthews,
182 F.2d 322.
The shipowner here holds petitioner's uncontroverted agreement to perform all of the shipowner's stevedoring operations at the time and place where the cargo in question was loaded. That agreement necessarily includes petitioner's obligation not only to stow the pulp rolls, but to stow them properly and safely. Competency and safety of stowage are inescapable elements of the service undertaken. This obligation is not a
-contractual obligation implied in law or arising out of a noncontractual relationship. It is of the essence of petitioner's stevedoring contract. It is petitioner's warranty of workmanlike service that is comparable to a manufacturer's
warranty of the soundness of its manufactured product. The shipowner's action is not changed from one for a breach of contract to one for a tort simply because recovery may turn upon the standard of the performance of petitioner's stevedoring service. [
of warranty as a defense. Respondent's failure to discover and correct petitioner's own breach of contract cannot here excuse that breach. [
44 Stat. 1424 et seq., as amended, 33 U.S.C. § 901
For procedure to secure an award of compensation,
§ 19, 44 Stat. 1435-1436, as amended, 33 U.S.C. § 919.
A longshoreman, after accepting compensation payments from his employer without an award, may sue a third-party tortfeasor for his injuries.
330 U. S. 454
-456. If the facts permit, he may recover from the shipowner for unseaworthiness, or for negligence, or both.
Pope & Talbot v. Hawn,
In the instant case, the stevedoring contractor, however, has received a contractual
from the shipowner for assuming responsibility for the proper performance of all of the latter's stevedoring requirements, including the discharge of foreseeable damages resulting to the shipowner from the contractor's improper performance of those requirements.
Restatement, Contracts, §§ 334, 330;
Bethlehem Shipbuilding Corp. v. Joseph Gutradt Co.,
10 F.2d 769;
Mowbray v. Merryweather,
[1895] 2 Q.B. 640 (C.A.).
§ 33(a) in
See Westchester Lighting Co. v. Westchester County Small Estates Corp.,
278 N.Y. 175, 15 N.E.2d 567. Other state courts have reached comparable results as to exclusive liability clauses in their respective Compensation Acts. 2 Larson, Workmen's Compensation Law, §§ 76.00-76.44(a).
We do not reach the issue of the exclusionary effect of the Compensation Act upon a right of action of a shipowner under comparable circumstances without reliance upon an indemnity or service agreement of a stevedoring contractor.
See Brown v. American-Hawaiian S.S. Co.,
211 F.2d 16, 18;
States S.S. Co. v. Rothschild International Stevedoring Co.,
205 F.2d 253;
Slattery v. Marra Bros.,
186 F.2d 134 (N.J. statute);
United States v. Rothschild International Stevedoring Co.,
183 F.2d 181;
American Mutual Liability Ins. Co. v. Matthews,
182 F.2d 322;
American District Telegraph Co. v. Kittleson,
179 F.2d 946;
McFall v. Compagnie Maritime Belge,
304 N.Y. 314, 107 N.E.2d 463.
Weinstock, The Employer's Duty to Indemnify Shipowners for Damages Recovered by Harbor Workers, 103 U. of Pa.L.Rev. 321 (1954).
See Brown v. American-Hawaiian S.S. Co., supra; Crawford v. Pope & Talbot, supra; McFall v. Compagnie Maritime Belge, supra;
Weinstock, The Employer's Duty to Indemnify Shipowners for Damages Recovered by Harbor Workers,
See Union Stock Yards Co. of Omaha v. Chicago, B. & Q. R. Co.,
Brown v. American-Hawaiian S.S. Co., supra; Crawford v. Pope & Talbot, supra,
206 F.2d at 792-793;
American Mutual Liability Ins. Co. v. Matthews, supra,
182 F.2d at 323-325;
Rich v. United States, supra; Bethlehem Shipbuilding Corp. v. Joseph Gutradt Co., supra; Mowbray v. Merryweather, supra; Dunn v. Uvalde Asphalt Paving Co.,
175 N.Y. 214, 67 N.E. 439.
See Berti v. Compagnie De Navigation Cyprien Fabre,
213 F.2d 397;
Hastorf Contracting Co. v. Ocean Transportation Corp.,
4 F.2d 583,
4 F.2d 584;
Mowbray v. Merryweather, supra; Boston Woven Hose & Rubber Co. v. Kendall,
178 Mass. 232, 59 N.E. 657.
The petitioner, Ryan Stevedoring Company, is an employer subject to the Longshoremen's and Harbor Workers' Compensation Act. [
] Section 5 of that Act completely abolished all rights of longshoremen to sue their employers for injuries resulting from negligence of the employer or his employees. The Act substituted for old tort remedies a prescribed schedule of compensation for employees' injuries or death which was declared to be
These issues were properly submitted to the jury by the judge in his charge. He told the jury that it could not find the ship unseaworthy on account of the way in which the goods were unloaded in New York. The issue thus revolved around stowage in South Carolina which was actively supervised by the ship's officers. The court submitted to the jury the questions, among others, as to whether the ship had available for use proper equipment to stow these dangerous rolls, and whether the ship's officers were guilty of negligent loading and stowage in South Carolina. The jury gave Palazzolo a verdict for $75,000. The trial judge found, in deciding the shipowner's indemnity claim against the stevedore, that the ship's officer present at the stowage "did not properly perform his admitted duty to supervise the safe and careful loading of the vessel," although he had "authority to remedy the condition or halt the work." 111 F.Supp. 505, 507. He concluded from this and other findings [
] that the ship and the stevedore were "joint tortfeasors," and therefore declined to order the stevedore to reimburse the shipowner.
negligence. [
] The Court of Appeals justified imposing payment of the $75,000 verdict on the stevedore on the ground that Palazzolo's injury was due to the "sole," "primary," or "active" negligence of the stevedore's employees. But the court's suggestion that the injury could have been due to the "sole" negligence of the stevedore is answered by the part of the court's opinion holding that there was adequate evidence to support the jury and trial court findings that the shipowner itself was negligent. Use of the words "primary" and "active" seems to indicate that the Court of Appeals believed it should look at this cold record and find for itself whether the stevedore's employees or the ship's employees were guilty of this type of negligence. I do not agree that the Court of Appeals should make such findings. And if the Court of Appeals' cryptic statements about "sole," "active," and "primary" can be considered as upsetting any of the findings of the trial court, I think the Court of Appeals' action should be set aside as clearly erroneous.
348 U. S. 19
Act. That Act was revolutionary in its field. It took away from longshoremen the right to sue their employers for negligence, and substituted a fixed schedule of compensation for injuries regardless of fault. Many workers and employers opposed the compensation scheme. The workers deplored loss of their chance to get big tort verdicts. But Congress thought it best to give them a more certain and less expensive recovery, even though far less in amount than some tort recoveries might be. Many employers preferred to take their chance on defeating employees' damage suits under the old tort system. The idea of "liability without fault" was abhorrent to them. Congress weighed the conflicting interests of employers and employees and struck what was considered to be a fair and constitutional balance. [
] Injured employees thereby lost their chance to get large tort verdicts against their employers, but gained the right to get a sure though frequently a more modest recovery. However, § 33 did leave employees a chance to recover extra tort damages from third persons who negligently injured them. And, while Congress imposed absolute liability on employers, they were also accorded counterbalancing advantages. They were no longer to be subjected to the hazards of large tort verdicts. Under no circumstances were they to be held liable to their own employees for more than the compensation clearly fixed in the Act. Thus, employers were given every reason to believe they could buy their insurance and make other business arrangements on the basis of the limited Compensation Act liability. More than that, § 33 of the Act also provides that, for compensation paid an employee, an employer shall himself be reimbursed or indemnified out of any money collected as a result of an employee's claim for negligent injury by a
I agree, of course, that, if the employer here had made a contract, oral or written, agreeing to hold this shipowner harmless or to indemnify the shipowner against liability for injuries to petitioner's employees caused by the shipowner's negligence in whole or in part, the contract would have been valid and indemnity could have been obtained. For the Longshoremen's Act does not forbid employers under it to make independent agreements to indemnify others. But I think there is not the slightest support in this record for a finding that any such contract was made. No such allegation was made in the shipowner's complaint. And the shipowner's counsel was careful to stipulate during the course of the trial that his action was not based on a contract but on common law indemnity. [
] I recognize that common law indemnity may
A genuine contract, as distinguished from a liability imposed by law, sometimes called a "
-contract," requires mutual agreement of the parties. It is for this reason that the courts have frequently said that the cardinal rule in the interpretation of contracts is that the intention of the parties should be ascertained and enforced. [
] And courts do not ordinarily stretch language in order to
find that one person has agreed to indemnify another when the latter negligently hurts someone. [
] Special caution should be used in construing contracts so as to impose indemnity liability on companies not engaged in the business of writing indemnity insurance.
work contracts so as to make them indemnity contracts? Surely, before this Court determines the existence of a contract and the scope of its coverage, the case should be sent back to the trial court so that these issues could be determined after a full hearing on the facts. The issues were not tried in the District Court and not tried in the Court of Appeals. The issues have never been tried. In
, we remanded a case to the trial court for a hearing on evidence as to the scope of a contract of indemnity even though it was written. Here, there is not even an oral contract to indemnify. Before creating a contract, it might be appropriate to follow the course we did in
Or is the Court rejecting this phase of
Porello?
Cf. Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.,
There has been considerable disagreement in this Court and among other courts about three of our recent holdings,
. In each of these cases, a worker in the same position as Palazzolo sued a shipowner alleging negligence and unseaworthiness. Judgments were obtained against the shipowners. We held in the
case that the shipowner could not, under the common law doctrine of "contribution," force injured employees' employers to pay part of the judgment against the shipowner. The
cases were reaffirmed in
In that case, we refused to permit a shipowner to shift part of his loss to the injured person's employer on his argument that the employer, who was under the Longshoremen's Act, negligently contributed to the injury. We rejected the contention on the ground that, if accepted, it "would frustrate this [Act's] purpose to protect employers who are subjected to absolute liability by the Act." 346 U.S. at
. The Court's opinion today provides a way under which, by simple change of words and remedial formulas, the results reached in our three former cases can be undermined. Employees like Sieracki and Palazzolo will find it practically impossible to get their cases for injuries against third persons tried in a court. And a shipowner who wants to shift liability wholly to a stevedoring company can do so by a very simple method. He can allege that the stevedoring company intentionally made a contract agreeing to indemnify him under circumstances like those in this case; that allegation will be automatically proved by simply establishing the fact that
the stevedoring company contracted to do some work on the ship; the result will be that the employer is wholly deprived of the protection of limited liability which the Act was intended to provide. And while this will be accomplished under the name of "contract," it will really by achieved because the Court has announced as an absolute principle of law that, without regard to whether a stevedoring company intends to agree to indemnify, it has so agreed if it agrees to do a job. Thus, by indirection, rights of longshoremen and their employers recognized by this Court in
Sieracki, Halcyon,
are taken away. In effect, the
case is rejected.
44 Stat. 1424, as amended, 33 U.S.C. § 901
See Crowell v. Benson,
285 U. S. 37
Cf. Ives v. South Buffalo R. Co.,
201 N.Y. 271, 94 N.E. 431.
16 Pet. 528,
41 U. S. 534
Canal Co. v. Hill,
15 Wall. 94.
cases collected in Note, 175 A.L.R. 8, 29-32.