Earl Warren: Number 445, Lake Tankers Corporation, Petitioner, versus Lillian M. Henn, Administratrix. Mr. Underwood.
Eugene Underwood: Mr. Chief Justice, if the Court please. This is an admiralty proceeding for exoneration from or limitation of liability in a collision case in which the petitioner in this Court was the petitioner for exoneration from or limitation of liability in the District Court. In brief, the facts are these. The petitioner owned a tug and a barge which were proceeding up the Hudson River in the middle of the night when a small pleasure craft on which there were 11 people proceeding in the opposite direction, south in the Hudson River, collided with the barge, capsized, sank and was a total loss. And the 10 of the passengers on that little boat survived, but one lost his life, the respondent's husband lost his life. I should say to you that the tug and the barge were made up in push-tow fashion. That is to say, there is in the stern of the barge of the -- in which the tug puts its bow and the barge is securely lashed to the tug so that the tug has utter and complete control over the barge in every respect. Following this collision and the loss of the little boat called Blackstone, five actions at law were begun in the state court. One to recover for the death of the respondent's husband, and another, to recover for personal injuries and the loss of the Blackstone. And in these two suits, on behalf of five people, including the respondent, the claims aggregated $657,500.
Felix Frankfurter: What was the second general -- what was the second proceeding in the state court?
Eugene Underwood: There were two actions in the state court.
Felix Frankfurter: Yes. One was for the husband, isn't it?
Eugene Underwood: Yes, Your Honor, and the other one was on behalf of four of the passengers who combined in one action. And they claimed personal injuries as well as the loss of the Blackstone. There was --
Felix Frankfurter: Did you said also the Blackstone?
Eugene Underwood: Also the Blackstone. That's --
Felix Frankfurter: Did they -- they brought suit against the barge and the tug as well as the Blackstone?
Eugene Underwood: If Your Honor please, the -- the action in the state court was in personam against the petitioner here.
Felix Frankfurter: Yes, I understand that. But --
Eugene Underwood: They claimed for the loss of the Blackstone which was the little yacht. The tug was the Eastern Cities.
Felix Frankfurter: Yes.
Eugene Underwood: The barge was number 38 and --
Felix Frankfurter: (Inaudible) down slow. It was a suit by the widow and then the suit on behalf of four passengers for injury?
Eugene Underwood: Yes, Your Honor.
Felix Frankfurter: Against the tug -- against the owner of the tug and also the Blackstone owner?
Eugene Underwood: Yes.
Felix Frankfurter: I see.
Eugene Underwood: Yes. But the owner of the Blackstone was a plaintiff in one of these actions to recover for his personal injuries and for the loss of his vessel.
Felix Frankfurter: And that loss -- for the loss of the vessel that was brought in the state court?
Eugene Underwood: Yes, Your Honor.
Felix Frankfurter: Under what? Common law?
Eugene Underwood: Yes. There have been six other persons who had then spilled into the water and were rescued still to be heard from. This petitioner filed its petition for limitation of -- or in the first instance exoneration from liability because the claims vastly exceeded the values involved. As I have said to you, the claims are for the five amounted to more than $650,000, and yet the value of the tug was $110,000, the barge $165,000, and the freight money, $8500. The aggregate of the petitioners interest therefore in his -- its vessels were $283,500. Accordingly, we filed the petition. It's appearing that there would be need to distribute a limited fund if liability should be decreed. A bond was given only for the tug at that time for this reason. It is well settled by the decisions of this Court that where a barge is solely in control of a tug, she is not liable and her value does not have to be included in the limitation fund unless she'd be guilty of some individual fault in rem of her own, and there was at that time no claim that she was. This respondent accepted to our petition on the ground that we had not given adequate security and claimed on that occasion that the barge was in -- at fault in rem because of not showing of proper lights. The judge sustained those exceptions but gave us leave to file an additional bond for the barge which we promptly did and there's no dispute about the amount and there has been almost from the beginning a bond posted in the District Court for the full amount of the value of the two vessels plus the freight money. In that proceeding, in that limitation of liability proceeding, this respondent filed her answer in denying our claim to limit liability if liable, and of course, denying that we are entitled to exoneration. In that proceeding, however, she filed claim in a substantially reduced amount, namely, for $250,000 instead of $500,000. In that proceeding also, the 10 other passengers filed claims, but in an aggregate of only $9500, I am sorry to trouble you with the figures but they do become important, the arithmetic is of importance here. So that these claims which -- when the petition was filed, aggregate of $657,500 with six more to be heard from were -- when all the claims were filed in the limitation proceeding itself, only $259,500. At that stage, this respondent again made a motion in the District Court, this time to vacate the injunction on the ground that the claims could not possibly equal the fund that an inadequate fund was necessary to sustain the proceeding, and therefore, she wanted to have the restraining order vacated as to her and allow her to proceed in the District Court. This came on before --
Felix Frankfurter: Why would it came to the District Court?
Eugene Underwood: I'm sorry, in the state court.
Felix Frankfurter: State court.
Eugene Underwood: I misstated, I misspoken myself, in the state court. That motion came on before Judge Weinfeld and he denied the motion on the ground that it could not yet be said that the fund would necessarily be adequate. For this reason, the fund will be made up, assuming that there is liability at all, the fund will be made up of the value of the tug if the tug is at fault, of the barge if the barge is at fault but not of either that is not personally at fault in rem. So, my argument was, and Judge Weinfeld agreed with my argument at that time, that you can't say that this fund is bound to be enough until you decide which of these vessels was liable in rem. And you can't do that until after trial, and therefore, you should not vacate the restraining order and allow this action at law in the state court to go along by itself. The judge agreed with all of that and denied the motion but he added a little caveat at the end of his opinion and he said; however, if this respondent, claimant as she was called in that Court, will reduce her claims so that the amount of the claims against each vessel is less than that vessel's value, then she may proceed in the state court. Well, with that advice from the judge, the necessary stipulations and so on were filed in the District Court and a new motion was made to vacate the restraining order as to this respondent and that motion was granted. The theory then being that there were two funds, two sort of separate proceedings, which the Court of Appeal later said very explicitly, one for the tug and one for the barge. This respondent had allocated her $250,000 claim, a $100,000 to the tug, and a $150,000 to the barge. So that when you add the $9000 I had claimed for all the other 10, the aggregate of the claims against the tug is less than her value and the aggregate of the claims against the barge is less than the barge's value.
Hugo L. Black: There is no -- no change in the common ownership of the barge and the tug at any point along the line?
Eugene Underwood: No, Your Honor. The -- the ownership remains the same. This petitioner owns both. We appealed from -- from that decision and the Court of Appeals affirmed by divided court. Judge Frank and Judge Clark were the majority and Judge Hincks wrote the minority opinion. The affirmance was on two grounds. One, that concourse may only be had in these cases when the fund is definitely not adequate. You've got -- you've got to have an inadequate fund as a prerequisite to sustaining a limitation of liability proceeding. And the Court went along with Judge --
Felix Frankfurter: You do not challenge with that, do you?
Eugene Underwood: Yes, I do, sir. I do.
Felix Frankfurter: You do challenge?
Eugene Underwood: I do. And the Court also held that there are here, indeed, they said this proceeding must be treated as if it were two separate proceedings. It is not, but the Court of Appeals held it must be treated as if these were two separate proceedings, one for the tug and one for the barge and the fund in each is adequate on the basis of the arithmetic that I have told you about.
Felix Frankfurter: Could you -- would you be good enough to state affirmatively what it is you do contend for in challenging that if the fund exceeds the claims, the basis for limitations doesn't exist?
Eugene Underwood: Yes, if Your Honor please. I claim that on the basis of the statute and the rules of this Court, and the old decisions of this Court, as I believe, taken in to the reenactment of the statute in 1936, make it perfectly plain that one of the two basic reasons for the limitation of liability proceeding is to bring all claims in such a case into concourse so that the merits may be disposed of, the liabilities may be disposed of in one proceeding affecting all the parties at the same time, not only to distribute an inadequate fund, it isn't a kind of a bankruptcy, it's more than that.
Felix Frankfurter: It's a bill in equity to -- it's a bill of interpleader as it were.
Eugene Underwood: Yes. It were -- that phrase has been used in some of the old decisions.
Earl Warren: Suppose the value -- suppose the value of the ship was intimately more than the aggregate of the claims, do you -- would you -- you'll still believe that the limitation of liability proceedings should require all claims to be brought in?
Eugene Underwood: If Your Honor please, I think that it gets back to a matter of good faith, if I may answer your question that way. I'll -- I'll be happy to answer your question right now. The -- the origin of this so-called rule in the Second Circuit, as I have referred to it in my brief, is just such a case, it was the Aquitania. The Aquitania sank a small fishing vessel. Upwards of two years went by when the lawsuits brought in the state court by the next of kin of the people who lost their lives in that fishing boat were pending and were coming on for trial. Then, as they were about to be reached for trial, all in one bunch, the owners of the Cunard Line, the owners of the Aquitania; filed a petition for limitation of liability and represented in their petition that the value of the Aquitania was $9 million. And the claims, as was later demonstrated, because Judge Augustus Hand do have the case, sent it to a commissioner to find out how much the claims were, could not exceed about $300,000. So the -- the petition was attacked of its foundation on the ground that it had not been brought in good faith. And that was the reason that that petition was treated the way it was, the restraining order was vacated. And I -- I'll come to this a little later on in the regular course of my argument, if I may, but answering Your Honors question, the rule for which I would contend in the last analysis in this Court is simply this. That if at the time the petition is filed, the vessel owner, in good faith, fears -- reasonably fears, if you like, that the claims will exceed the fund, he is entitled to file his petition and the Court cannot be -- and jurisdiction properly attaches at that stage under those conditions and that the Court does not lose its jurisdiction because it later appears that the petitioner was unduly pessimistic.
Felix Frankfurter: That's a very different thing from regarding it merely as a suit, as a proceeding to avoid multiplicity of suits.
Eugene Underwood: I don't think it can be sustained solely on that ground. I -- I want to add this other feature to it.
Felix Frankfurter: Yes I -- well, that mean -- that alone isn't sufficient. You're introducing a -- adifferent --
Eugene Underwood: If Your Honor please, I -- my argument is based upon what I concede to be the law as developed by the cases over this period of 75 years or more. And I --
Felix Frankfurter: Is it the general principle in equity if the Court is ceased of jurisdiction and if it turns out that -- there couldn't be a grant of injunction. It may nevertheless assess damages at -- at -- if in the beginning it had -- had brought the jurisdiction on the treaty --
Eugene Underwood: Well I --
Felix Frankfurter: -- that your -- all right. I follow you.
Eugene Underwood: I was about to say a moment ago, I think, the grounds for Judge Hincks' dissent. He dissented from the majority on the ground that there is, in fact, here, only one proceeding. There is only one petitioner and there is one indivisible claim by this respondent, and therefore, there is no need, and indeed it is altogether improper to regard it as if it were two. Also, he based his dissent on the ground that the prosecution of the respondent's action in the state court must necessarily be fruitless, and the reason for that I will come to when I make that point in my argument, if I may. We filed petition for a rehearing and a rehearing in the bank. They granted the petition for rehearing in the bank but after that rehearing which was by briefs, not oral argument, I only gained one judge and they -- the Court reaffirmed its position to forward it too instead of the original three-to-one whereupon, they applied for certiorari and here we are.
Speaker: Who did you acquire in that precedent?
Eugene Underwood: Judge Medina.
Felix Frankfurter: They didn't write anything, did they?
Eugene Underwood: No, sir, they did not. So I have really three points here. One, that under these circumstances, at least, an inadequate fund is not a prerequisite, an absolute prerequisite to maintaining the petition. Secondly, even if it'd be, it cannot yet be said that the fund must be inadequate. And third, that the state court action must be fruitless in any event hence, it should not be -- we should not be required to proceed in the state court. Now at the outset, I should like to refer to the statute which is printed completely beginning at page 39 of the -- the petitioner's brief in an appendix. And what we concede to be of more important passages of it are printed beginning at page 2. We say at the outset that -- and it's part of the claim that the statute nowhere says that an inadequate fund is necessary to maintaining the proceeding. Section 183 (a) provides that where the owner without privity or knowledge is liable, and his liability shall not exceed the value of his interest in the vessel. I should add parenthetically that the other provisions of Section 133, after subsection (a), relate to seagoing vessels and a so-called statutory fund of $60 per ton which is not any part of this case because our vessels here were not seagoing. And at Section 184 provides that where the fund is not adequate, either the owner of the vessel or the persons who have suffered loss, may institute the proceeding and Section 185 provides and this is -- was the law when this incident occurred that the vessel owner, within six months after a claimant shall have given to or filed with such owner a written notice of the claim may petition at District Court, and so on. And the last sentence of that provision is of considerable significance as it seems to us. It provides, upon compliance with the requirements of this section, all claims and proceedings against the owner with respect to the matter in question shall cease. Now, the Act did not set up any procedures. This Act was originally passed in 1851. It set up no procedures for invoking its benefits. And it was 20 years before this Court had occasion to consider the making of rules, and I'll come in a moment to the decision that caught -- that brought that about. But the rules are now Rules 51, 52, 53, 54, and 55.51 is the rule of this Court which requires -- which defines what the petitioner in a limitation proceeding must say in his petition, and it does that with considerable particularity. It's at page 44 of the petitioner's brief here. It shall set forth the facts or state the facts showing that the petition is filed in the proper district. It must show the amount of all demands including all unsatisfied liens or claims of liens arising on the voyage in question. And what suits, if any, are pending and the value of the vessel, the closer the void that is it asks this pertinent arithmetical questions. How much in the way of claims are you faced with? And on the other hand, what value have you got in your vessel? But nowhere does the rule say that the claims must exceed the value of the vessel. And of -- of great importance to our view, at least, is rule 53 which provides that in these proceedings, the petitioner shall be at liberty to contest his liability as we do in this case. Now, going back to Rule 51, it provides that after reciting these various particulars in the petition, the petitioner may give an interim stipulation and then the last part of Rule 51 at page 47 of our brief provides the said court shall also on the application of the petitioner make an order to restrain the further prosecution of all and any suit or suits against the petitioner and so on. That is having filed the petition in keeping with the Court's rules about what the petitioner must alleged. In having given the bond, the petitioner is entitled to a restraining order until this proceeding has been carried through with conclusion. That's what we think that means. And the word is "shall restrain." Now we think that the cases -- cases show -- cases decided by this Court show that concursus on the question of liability is just as much a part of the intention lying behind this proceeding which in a large way is the creature of this Court, is the creature of the rules of this Court as the division of an inadequate fund. The first case that came to this Court was in 1871, 20 years after the statute was passed. It was Norwich Company against Wright. And there, after an -- after an interlocutory decree had been entered --
Earl Warren: May I interrupt just a moment? You say that the question of liability is -- is just as important as the -- as the amount of the fund, as I understood you to say --
Eugene Underwood: A question of determining liability in one proceeding amongst all the claimants on the one hand and the petitioner on the other.
Earl Warren: But is there anything to -- in the statute or in the cases to indicate that -- that that is important without the other?
Eugene Underwood: Yes.
Earl Warren: That's what I -- was there anything in the statutes here that --
Eugene Underwood: Not in this -- not in the words of the statute.
Earl Warren: All right.
Eugene Underwood: I think -- I think -- (Voice Overlap)
Earl Warren: I get to what your arguing about.
Eugene Underwood: I -- I think the proceeding has to be dealt with as a combination of the statute of 1851 and this Court's rules of 1871 and this Court's uniform decisions from 1871 down up to 1936 and the reenactment of this statute in 1936 with the gloss of this Court's decisions upon the statute and without any change particularly in the light of what the Congress was told at that time about the perks of the whole proceeding. And I'll -- bear with me till I get to it, I'll be there shortly, I think. In this Norwich Company against Wright, that was a collision case and the liability had been determined as was the practice for a great many years in a separate proceeding. Limitation for many, many years was not sought until liability had been determined in some separate proceeding. There, the court -- this Court said that -- pointed out that the Act didn't say in what court the benefits of the statute should be invoked. The Court said that no court was better adopted to do that than the admiralty that the state courts do not have the requisite jurisdiction and that this Court undoubtedly had the power to make all the need for rules and regulations for facilitating the course of the proceedings. This Court said that the shipowner need not admit liability but may institute proceedings to determine the liability as with being hit on the one hand and all the payments at one time on the other hand. And having filed its petition or giving -- given security for the fund, the shipowner will be entitled to an order restraining the prosecution of all other suits. And that if an action should be brought in a state court, the shipowner can follow the same procedure and restrain the further prosecution of that suit. That was in 1871. The opinion was written by Mr. Justice Bradley. I mentioned that because he wrote at least two or three letters delineating the purpose of the Court in the making of these rules. The making of the rules was referred to in -- in that opinion and the rules were handed down at the same term of the court. So that, I think that Norwich Company case has a great deal of meaning in the interpretation of the rules himself showing their purpose, the purpose of this Court in making these rules.
Felix Frankfurter: Well he announced that it would be. In his opinion, he said; we are now passing rules.
Eugene Underwood: Yes, sir. He did, Your Honor. That is correct. And the next case, I think, was the benefactor also written by Mr. Justice Bradley in 1880 where he said, concerning the purpose of the rule, the 56th Rule and it was then the 56th Rule has become now the 53rd Rule. It was merely intended to relieve the shipowners from the English rule of practice which requires them when they seek the benefit of the law of limited liability to confess the ship to have been enfold in the collision, to require the owners of either vessel to confess fault before allowing them to -- to claim the benefit of the law would go far to deprive them of this benefit altogether. Hence, this Court in preparing the rules of procedure for our limitation of liability, deemed it proper to allow a party seeking such limitation to contest any liability, whatever. So that the purpose of this Court in setting up this form of procedure to allow the vessel owner to contest his liability in one proceeding with all the claimants against him, however few, or however many is perfectly clear. Again, in -- and this is one of the most significant cases in the books on this subject, Providence against -- and New York Steamship Company against Hill, decided in 1883 by this Court, was really a contest between the state courts in Massachusetts and the federal courts to see who was really going to win out and decide these cases for all the time to come. Mr. Justice Bradley wrote the opinion in that case. There, a ship had burned alongside a dock in New York and consumed some cargo owned by the Hill Company which was a Massachusetts concern, they sued the shipowner in Massachusetts. The shipowner filed his limitation proceeding. He sought exoneration under the fire statute and limitation of liability if he should be held in the federal court in New York. The Massachusetts court was told about dependency of the limits -- limited liability proceeding and the restraining order had issued and the restraining order was properly served and all that, but the Massachusetts court went right ahead and carried that case through the conclusion and entered judgment against the Steamship Company. Then on appeal that came to this Court, and this Court said -- Mr. Justice Bradley said, before the Court, many significant things. One of the most significant to our way of thinking is that the statue must not be administered with a type of grudging hand. It must be -- and this Court has said this in a dozen cases and which we referred to in our brief, the statute must be construed liberally to accomplish the intention behind it, the statute and the rules. The limit -- the limitation of liability theory was only sketched and outlined by the Act, and the regulation of details as to the form and modes of proceeding was left to be described by judicial authority. Then the Court reviewed the rules and mentioned again the purpose to allow the shipowner to contest his liability in one proceeding against all the claimants at one time. They referred to the basis, the power of this Court had to make rules as to process actions and so on. And said again that the rules were the deliberate judgment of this Court as to the proper mode of procedure. And the -- the opinion goes on to say for the purposes of having their rights under the Act declared and settled by the definitive decree of a competent court which should be binding on all parties interested and protect the shipowners from being harassed by litigation in other tribunals. I won't read anymore extracts. There are many if -- if -- when the Court comes to read these -- all decisions of this Court, I am sure you would see that this -- this thread of purpose to bring all these people into concourse, not only for the purpose of distributing an inadequate fund, but also for the purpose of determining in one proceeding what the liability shall be is a very real and basic purpose behind the promulgation of these rules in the first place it has been ever since.
Felix Frankfurter: May I ask you, what --
Earl Warren: I was going to say in that particular case, which was the larger, the fund or the claims?
Eugene Underwood: At the best of my recollection, the -- if Your Honors please, I don't recall. I don't recall your arithmetic. I don't want to guess. I don't remember.
Earl Warren: Well, do you have -- do you have any -- any case in this Court where the -- the fund was larger than the aggregate of the claims with the results that you have just given?
Eugene Underwood: No, Your Honor, I do not.
Earl Warren: There is no case.
Eugene Underwood: There is no such case.
Earl Warren: Insofar as this Court is concerned, this is a matter of first impression.
Eugene Underwood: Well, on precisely these facts, yes. But I'll -- there are four possible situations and I'll -- if I may come to that very shortly now and try to show how the same thing has been arrived at in different situations, very much the same as this, then going on down through the years in -- in the Hartford Accident case in 273 U.S. Mr. Justice Taft wrote the opinion in that case. And there again, he delineated the -- he stated that the purpose of the statute and the proceedings adopted by the rules was to bring all the parties into concourse to determine liabilities as well as to distribute an inadequate fund. And the same thing is true in Spencer Kellogg against Hicks where the opinion of this Court was written by Mr. Justice Roberts. Now, in 1936, two years after the Morro Castle burned, the Congress had this question before it again and considered the whole thing and only made one substantial change in the statute. For seagoing ships, it required the shipowner where the fund was not large enough itself to make up an amount equal to $60 per ton of the ship -- of the ship's tonnage. That doesn't apply to this kind of a situation because these vessels were not seagoing vessels and that $60 ton fund was limited to seagoing vessels. It also made another significant change, namely, it required the petitioner to institute his proceeding within six months at the time he receives his first written notice of claim. That has not been the law before. Prior to that time, the petitioner, the vessel owner could start its petition that anytime, that even after he had tried the case on the merits and -- and lost it in appeal two or three times. Now, when Congress was considering that the whole thing, as it did at great length at that time, it had some of the most eminent members of the admiralty bar and had that testimony on hearings, and as this Court referred in the Maryland Casualty against Cushing case, the -- the purpose of the proceeding was then explained very clearly to Congress. The purpose was to get a consensus or concursus in one proceeding to determine the liabilities as well as to distribute the fund. And our position is, that having been told that that was the purpose of the proceeding and with the gloss of all this Court's many statements as to that purpose, when Congress reenacted the statute in 1936 and made only those changes which do not affect this aspect of the case at all, that was, we think, a certainly -- a blessing on this Court's prior decisions which have said so many times that the purpose of the thing is to bring everybody in to concourse on the merits and not merely to distribute an inadequate fund.
Felix Frankfurter: May I ask you a question, Mr. Underwood? As I understood you, you agreed that if a petition for limitation were filed instead the fund is larger than the claims but we come in here because you want all the claims to be litigated. You -- you would say that was -- that could be accepted here but that -- that's not and that would be thrown out. Did I understand --
Eugene Underwood: Under -- under the circumstances of the Aquitania, I think I would say, as the Court did in that case, that that petition is not filed in good faith. While they waited for -- waited for upwards of two years and they had all the people in one lawsuit anyway in the state court and the funds was $9 million in the claims --
Felix Frankfurter: Suppose you take out having had them all in one suit, I want to ask you questions before I put it as clearly as I can. If, as I understood you, the mere desire to dispose of all the claims in a fund, plainly adequate for all the claims, in order to avoid duplicity -- multiplicity of suit, if that in and of itself is not a basis for limitation proceedings, what is there in our rules of our decisions which makes the additional element which you have asserted this case -- I mean what you have in this case. Can you tell me, namely, that after proceeding -- when the proceeding was brought, it was believed that the fund was not adequate, is that right?
Eugene Underwood: It was believed that the fund was not adequate to it.
Felix Frankfurter: Now what has -- yes. Now, what is then and still is for the overview --
Eugene Underwood: Yes.
Felix Frankfurter: What is there which makes that added element, namely, that it was in good faith and believe that the fund was not adequate though the way Judge Weinfeld's suggestion redistributed the claim made the fund adequate. What is then our rule that does permit? Do I made myself clear?
Eugene Underwood: I -- I think so, let me try to answer it this way. When I was answering Mr. Chief Justice Warren's question, I was trying to answer it having in mind the scope of all the decisions on this point as they affect this case, and one of those is the Aquitania to which I refer. If I may say so, looking alone at this Court's rules and this Court's opinion, such a refinement is not permissible or necessary. Under the statute and this Court's rules and this Court's decisions, our position is, that it would be quite proper to file a limitation of liability proceeding and frankly say we know the claims don't exceed with the fund but we want to get on (Voice Overlap) -- we want to get them all at one time. But in answering the Chief Justice's question, I've tried to tell you what I know about the law, generally, and the Aquitania is the basis for the so-called rule in the Second Circuit which exists nowhere else, by the way. In the Ninth Circuit, the Court there has expressly said that it is enough if the claim seem to exceed the fund in good faith when the petitioners filed.
Felix Frankfurter: What's the date of the case -- about and what it is?
Eugene Underwood: About 1926 or 1927 and thereabouts, 1926 or 1927.
Felix Frankfurter: So that when you say the rule of Thirteenth Circuit, we haven't glanced at that question specifically, have we?
Eugene Underwood: I think not. Except -- perhaps in Maryland Casualty against Cushing, that was discussed -- yes -- yes -- if Your Honor please, I am wrong. That -- this question has been considered in the Hartford Accident against Southern Pacific and in Spencer Kellogg against Hicks since the Aquitania, I believe, if I have my dates right.
Hugo L. Black: What you're saying in effect, is it not, that your argument, that by the passing of this statute, it was intended to accomplish that which it accomplished in state courts to escape trial by jury through equitable injunction to prevent a multiplicity of suits.
Eugene Underwood: I think that's a fair statement.
Earl Warren: Mr. Underwood, would -- what is the standard of -- of good faith as you -- as you used it? What else go -- go to make it?
Eugene Underwood: Well, I wouldn't -- I would be content to accept the -- the rule as this Court has laid in down in the diversity cases which is one of my points here. It -- it's perfectly clear under the diversity cases that there is jurisdiction if the amount claimed exceeds $3000 in good faith. That is if -- if the plaintiff really feels that he has a claim, that he should assert in an amount in excess of $3000, that's enough. Now, of course, that looking out it in the plaintiffs point of view under the diversity case, the defendant in the diversity case is entitled to assume, unless, of course, there's been a collusion which is not suggested here at all, the defendant is entitled to assume that the plaintiff has made an appraisal in good faith of his case, and if he sues for $3100, there's the jurisdiction. The same -- the rule in the state court -- the rule in the diversity cases too is that, if he sues for more than $3000 in the state court and the defendant removes, the plaintiff cannot deprive the federal court of jurisdiction by reducing the amount of his claim. Now, that is what these claimants have in effect down here. They made claims for large amounts. These claimants were not passengers on our boat or members of our crew, we knew nothing of them.Our boats picked them up and put them in ambulances and they went to the hospital and that's all we knew about the amounts of their claims. Then they sue in the state court for amounts aggregating more than twice the value of our interests -- in -- in our two vessels. We couldn't possibly know that there was anything padded about those claims.
Felix Frankfurter: And the limitation proceeding followed the state court?
Eugene Underwood: Yes, Your Honor. Oh yes, it followed the -- the making -- the bringing of actual actions at law against us in the state court.
William J. Brennan, Jr.: Mr. Underwood --
Earl Warren: I -- oh pardon me.
William J. Brennan, Jr.: Excuse me, Chief --
Earl Warren: Go right ahead. Go ahead.
William J. Brennan, Jr.: I -- I just wondered, would you say that the Aquitania was rightfully decided independently of the factor of when that petition was filed, the timing in other words?
Eugene Underwood: No, if Your Honor please, I -- I would not. In view of the -- of the rule of this Court and the purpose of the rule as stated by this Court's decisions over the years which I've adverted to at too much length, I'm afraid, I would say that the Aquitania was wrongly decided which is simply another way of saying that I think concourse alone were enough to sustain the proceeding.
William J. Brennan, Jr.: Then the disparity between the $9,300,000 would not be a reason for that decision?
Eugene Underwood: Only as to --
William J. Brennan, Jr.: It had to add the fact that the petition was not filed until the cases in the state courts were about to come to file.
Eugene Underwood: Yes, Your Honor.
Earl Warren: Well, Mr. Underwood, I -- I'm having some difficulty with your -- with your argument. As I understood you, you answered to Mr. Justice Frankfurter that you; under the statute in our decisions, can go in to the District Court and frankly say the value of our ship greatly exceeds the amount of the claims and that you are entitled to -- to be in Court on this proceeding because this Court has recognized the -- your right to have your liability determined in -- in one action. Now, that being true, you say that the -- you also said, in answer to my question, that there must not be a lack of good faith. Now what would constitute a lack of good faith in -- in those circumstance -- in -- in filing a suit of that kind if you have that right as I have just outlined it.
Eugene Underwood: When I answered Your Honors question, I was trying to -- to bundle up in -- in one bundle, not only the decisions of this Court but the decisions of the Second Circuit, particularly the Aquitania and -- and tell you what the law was in this case as we got it up to the Court of Appeal in -- in New York. When I answered Mr. Justice Frankfurter's question, I was trying to tell him what I thought the law was as -- as delineative by the statute, the rules of this Court and the decisions of this Court. I don't think, in good faith, has anything to do with the matter at all. If I am right in saying that the statute, the rules and the decisions of this -- of this Court permit us to sustain the limitation proceeding regardless of the amount of the fund, whether it exceeds the claims or not. I'm sorry, I didn't make myself clear in the first instance.
Hugo L. Black: How do you know the case has decided the Aquitania case in which the Second Circuit --
Eugene Underwood: Yes. Oh, yes.
Hugo L. Black: -- held the same -- how many?
Eugene Underwood: Oh perhaps six -- each --
Hugo L. Black: Over what period of time?
Eugene Underwood: A period of about twenty years.
Felix Frankfurter: Thirty --
Eugene Underwood: Thirty years, Your Honor.
Felix Frankfurter: -- I just looked at the --
Eugene Underwood: Yes.
Felix Frankfurter: -- the Court of Appeals decision was in 1947, Mr. Underwood.
Eugene Underwood: The Aquitania?
Felix Frankfurter: Yes.
Eugene Underwood: Thank you, sir.
Earl Warren: Well as I understand, there's no one of those cases that you can point to where the -- the fund exceeded the claims?
Eugene Underwood: Yes. A case I was in, the petition of Trinidad and its in my brief and it's very recent. There, and this will give you a background of what goes on in these cases. I'm -- I'm taking more than time with my -- I'm allowed I'm afraid. In the petition of Trinidad, we filed a petition for limitation of liability and the claims clearly exceeded the fund. As is usual in these cases, we settle many of the claims. Our settlements whittle down always the amount of the outstanding claims, and one, we've been, perhaps, foolish enough to settle enough of the claims so that the remaining claims no longer exceeded the fund, then, these claimants went in, reduced the amounts as they had stated their claims to a figure just below the fund and then asked the Court to let them out from under the restraining order. The Court did so, the District Court did so. I appealed attempting to raise that question which is now here before this Court in this case. And the Court of Appeals said that true, the claims have been reduced to an amount less than the fund but it is so little less than the fund that we will not sustain the District Court in vacating the restraining order. So, there -- there is a case. I had forgotten it when I was asked a question a moment ago, but there is a case where the fund in the Second Circuit was admittedly enough to go around and pay everybody in full as against his reduced claims, and still, they would not relax the restraining order and made them all stay in the limitation of liability.
Felix Frankfurter: Which case was that?
Eugene Underwood: The petition of Trinidad Corporation.
Earl Warren: But that's hardly consistent with your theory though that it doesn't make any difference whether the fund exceeds the claims or not.
Eugene Underwood: I think they went on the -- they went on the theory that they were following the rule in the Aquitania, but the reduction had been -- the claims had been brought beneath the fund by such a small amount that it wasn't enough to ensure them that the claim was really enough to go around and that the fund was really enough to go around.
Felix Frankfurter: And Judge Hincks indicated and as you have said you would come to it, this case doesn't present -- present that issue in isolation, does it?
Eugene Underwood: No , it does not. The -- the great background of facts and -- and one further reason that I -- that I should like to mention here for the position that I take is these six months provision that was put into the statute by the 1936 amendments. That does not -- nowhere in the statute does it say that the claims have to exceed the fund, yet, the petitioner is bound to file this petition. If he's going to file one ever within six months of the first notice of claim, now it may well be that by the time six months have come and are about to expire, the claims will not exceed the fund. It may well be that these claimants will hold back. Indeed, I could give you cases that aren't in the books, but I know that that's been done as a strategy. If petitioner must allege that the claims exceeded the fund, he can be deprived of the right to limitation of liability entirely by the claimants getting together and just not filing more than one claim until after the six months have gone by and just giving him notice of one. That's a very -- very real and substantial risk. If -- if the Court please, both of my lights have -- have flashed and I'd like to save a few minutes for --
Felix Frankfurter: You may (Inaudible)
Eugene Underwood: -- a reply.
Earl Warren: You may, Mr. Underwood.
Frank C. Mason: Mr. Chief Justice and this Honorable Court.
Earl Warren: Mr. Mason.
Frank C. Mason: I think that it may clarify the picture, somewhat, if I should start from the beginning of this history of the opposing rights of a common law suitor as against this right of limitation granted by the 1851 statute. This Court in Langnes against Green, from which a great and -- and not that decision from -- that decision stemmed to great number of decisions in the Second Circuit under the Southern District Court having to do with this question as to the opposing right of the common law suitor and the right of the petitioner in limitation. In Langnes against Green, this Court cited the language of Judge Brawley in the case of the Lotta, an old District Court case in 150 Fed, in which he said, that the plaintiff had the right to pursue his remedy in the state court unless the Act providing for a limitation of liability clearly deprives him of it. And further said, just the two sentences, if the Court please, the plaintiff is entitled to be heard on that question. That is and -- and in the usual cause of the common law proceeding, that issue can be fairly tried. All that the petitioner can fairly claim is that he should not be subject to a personal judgment for an indefinite amount and beyond the value of his interest in the vessel and her freight. Now, the right of limitation arises under Section 183, which formally was Section 4283 of the revised statutes, and which says that the liability of the owner, in a case of a loss caused without his privity or knowledge shall not exceed the value of his interest in the vessel. On the other side of the picture, under title 28, Section 1333, we know, that the District Courts have original jurisdiction of any civil case of admiralty saving to suitors in all cases and all other remedies to which they are otherwise entitled. Now, what occurred here was that this claimant started her suit in Supreme Court Ulster County (Inaudible) for the death of her husband. And within a few weeks, the restraining -- the petition was filed then a restraining order issued. There was some preliminary motion there with respect to the amount of the security which was posted. My complaint being at the outset, that since we had sued the petitioner in the state court both as owner of the barge and as of the tug and charged her with negligence with respect to the personnel of both vessels, that it was -- should have been required to put up a bond for the barge as well as the tug. The fault being charged to the barge, not relating to navigation, but to the fact that her lights were inadequate, a very simple issue as to the barge. My first motion before Judge Weinfeld was based on the premise that the fund composed of the two bonds now was $283,000 and the claims total $259,000. The petitioner at that stage contended that the fund was inadequate on this theory. It said before Judge Weinfeld that here was not one fund of $283,000 but that here were two separate funds, one for the tug of $118,000 and another for the barge of $165,000, and since the claims total $259,000, they said clearly, the claims exceeded each funds just the same. Judge Weinfeld went along with that theory, denied my motion to lift the restraining order, the Court gave us permission to bring our claims to an amount reduced and to apply as to petitioner's liability as to each vessel. With the result, that by formal stipulation in which Mrs. Henn reduced her claim against the tug to $100,000, against the barge $250,000, the other claims in the limitation proceedings never had to be reduced although they were in greater amounts in the state court, they were always constant as $9500, therefore, the claims against petitioner's tug on worth was only $109,000 against the fund of $118,000 and against petitioner's barge owner in the sum of $159,000 as against the fund of $165,000. I should mention too to the Court, all 11 claims were accounted for. There was no possibility here that there would be some secret claims appearing later on. Now, Judge Weinfeld, upon the second motion then, following the petitioners own arguments on the first motion that here were two separate funds held in accordance with that theory lifted the restraining order because the fund was adequate for the tug and was adequate for the barge.Petitioner then took an appeal to the Court of Appeals complaining against that holding. Although, as I cite in my brief, the language in Judge Weinfeld's opinion makes no doubt of the fact that that was the petitioner's position before him on the first motion. And so -- and the Court of Appeals, it was again held, in line with what the petitioner contended, in line with what Judge Weinfeld held, that here, they would have to treat this proceeding as being composed of two funds, with respect to each of which the claims were less than the amounts of the funds.
Harold Burton: But they're still suing -- suing the state courts and not suing in -- in rem and that's likely to suing the owner.
Frank C. Mason: That suit in the state court, Your Honor, was being strained off course, you see, by the restraining order in the limitation proceeding, the one that puts it --
Harold Burton: Was it proceeding solely in rem?
Frank C. Mason: The limitation proceeding is solely in rem, Your Honor. In the state court, we sued the owner in personam alleging negligence of its employees on the tug and of its employees on the barge, and in that state court, so we also named as a defendant the owner of the yacht on board to which Mr. Henn was a passenger at the time of the collision, you see.
Felix Frankfurter: The limitation proceedings just for the -- the matter of mechanic, was there a petition?One petition for limiting liability on the barge and one on the tug?
Frank C. Mason: No, sir. That's -- that's where we had a little difficulty in the beginning, Mr. Justice Frankfurter. The petition, as you read it, alleges that the petitioner owned the tug; Eastern Cities, and it owned the barge L.T.C. No. 38, and it alleged that the petitioner had used due diligence to make each of these vessels seaworthy, you see. And they were all of the allegations that would be necessary to establish a right to file the petition for limitation, both with respect to the tug and the barge. But what was missing in the whole picture was that they trade for limitation of the petitioner and the tug, Eastern Cities for getting the barge. And they posted a bond originally, only, on behalf of the tug and the restraining order, we laid it not only to the tug but as to all claims against the petitioner. It was for that reason that I made the motion to dismiss the petition in the first instance on the ground that they should have posted security for the barge.
Felix Frankfurter: Well apart from posting, before you get to posting security, the security has posted for something in the limitation proceeding, was there a request for the limitation of these both against barge and tug?
Frank C. Mason: No.
Felix Frankfurter: Suppose the -- as you stated that the limitation was merely for the -- for the -- for -- what was it called?
Frank C. Mason: The tug, Eastern Cities.
Felix Frankfurter: The tug, Eastern Cities. Supposed they delivered the tug to raise itself posted and they could, very well, couldn't they?
Frank C. Mason: Oh yes, sir.
Felix Frankfurter: It was the Court -- City and the Eastern, tug --
Frank C. Mason: That's right.
Felix Frankfurter: And you hold it and -- and people get out of it whatever they got out it, would the barge also had to be delivered in that limitation proceeding?
Frank C. Mason: No.
Felix Frankfurter: Well then there's no limitation proceeding against the barge at all.
Frank C. Mason: Yes.
Felix Frankfurter: Is that it?
Frank C. Mason: Yes. To this extent, Your Honor, we had sued the petitioner in the state court in personam, you see, charging it with negligence --
Felix Frankfurter: I saw that.
Frank C. Mason: You see that? Now then, when they got the restraining order, upon filing the petition and the bond, the restraining order was against the -- the prosecution of any suit against the petitioner.
Felix Frankfurter: I understand that but I do not see how restraining state action ipso facto or automatically operate as a limitation proceeding against -- against the barge, does it? The fact that you -- you have prevented or prohibited and joined from proceeding with your state suit doesn't mean that the barge is in the -- is in the custody of a Court, does it?
Frank C. Mason: Oh no, no, Your Honor.
Felix Frankfurter: Well, then was there any limitation against the barge at all?
Frank C. Mason: The Court must have assumed that there was of this reason, because -- because Judge Ryan held that unless they posted a bond for the barge within 10 days, then the restraining order of which had been previously issued would have no effect as to the barge but only with respect to the petitioner and the tug.
Felix Frankfurter: I -- I think I understand that, but I'm wondering what would have happened if after the petition of Lake Tankers Corporation had been filed, they then said and they had made an offer and we -- we had brought in and handed over to the -- whatever you call it, to the Court, it would be the clerk or any, it turned over to the clerk , the barge and the -- and the tug, would they, under that petition? They didn't seem to ask for any limitations.
Frank C. Mason: No. They --
Felix Frankfurter: Because I'm interested in the second aspect of Judge Hincks' opinion to which you duly come that this isn't two proceedings but one proceeding.
Frank C. Mason: It is one proceeding in which they, themselves, contended, Your Honor, that there were two funds. And the courts treated them as two funds. The claimants reduced her claims because the petitioner took the position that there were two funds.
Felix Frankfurter: Is that the -- that's the whole sticking part whether by reducing the claim and making allocation, you make these two proceedings?
Frank C. Mason: Your Honor, I --
Felix Frankfurter: Suppose there had been no funds, I'm -- I'm trying to forget about the funds as a basis.
Frank C. Mason: Yes, sir.
Felix Frankfurter: Suppose the -- the Lake Tankers Corporation had surrendered the -- the vessels themselves no -- no posting of bonds. Of course, they -- they had -- the would have to surrender two vessels if there were two vessels. Would the proceedings then have continued as one proceeding against each of these two types of vessels?
Frank C. Mason: I think so for this reason. The Circuit Court said that and they contended in the court below that they had a right if they wished to file a separate proceeding for each vessel.
Felix Frankfurter: But they didn't do it, did they?
Frank C. Mason: They didn't do that. So then, they now take the position, if the Court please, having originally taken the position that there were two funds. Now, they have got the respondent they hoped in the position or they did in the lower court. That since, here is a fund for $118,000 and here is another one for $165,000, and the claims at $259,000, no one will ever know, they say, what is the true fund until after it filed wherefore they say. This woman is not entitled to have the injunction lifted to give her a state court right which she has by law.
Felix Frankfurter: Well, as a matter of fact, nobody wouldn't know what the amounts were on that.
Frank C. Mason: True. Therefore -- therefore, as the case has indicate, that this Court -- neither this Court nor the Circuit Court nor the District Court was called upon to fathom ultimate liability. You start with the point that the District Judge in his discretion determines whether or not the fund -- the possible fund, we call it, was adequate and that it -- were exceeded the amounts of claims now on file in the proceeding. He makes a preliminary investigation as the Circuit Court says to determine that. Once he determines by his preliminary look at the case that the fund exceeds the claims then concursus does not enter the picture and it is put squarely to this Court by the opinion of the Court of Appeals for the Second Circuit in petition of Texas and petition of Trinidad, which my friend refers to, that absent and adequate fund -- absent an insufficient fund, I should say, the Court says, "The statutory privilege of limiting liability is not in the nature of a forum non conveniens doctrine, the statute gives a ship-owner, sued in several suits, even in divers places, by divers persons, no advantage over other kinds of defendants in the same position." And all that comes down to is this in -- in a very few words, I think. I will not, for one moment, concede that what was called a limitation statute or Limitation Act in 1851 giving encouragement to shipowners to this extent that they shall not be liable for more than -- than their investment in the vessel that that limitation statute may as of this date in -- in 1957 be called a concursus statute. That in this day and age, limitation is to be forgotten and that it is to be assumed as my friend puts it. That even in the case of an adequate fund that the shipowner has a better right than the railroad men or the airline, that he may come in to Court and to the admiralty court and say, “I am being sued by 11 people. I will admit that I have an adequate fund. But I ask the Court to give me a restraining order and a limitation proceeding. Restraining these suits which are brought against me only because there is a multiplicity of suits which should be avoided." I would never go along with that. The Circuit Court doesn't go along with it in a number of cases. And Judge Frank, Judge Hincks, Judge Learned Hand, time and time again, have refused to take that position. In the case of Langnes against Green, the earlier one which is a single case, single plain case, the Court pointed out that this common law right to a jury trial must always be preserved.
Felix Frankfurter: But Judge -- Judge Augustus Hand in the Aquitania, according to Judge Addison Brown points out, indicate that it's so different if you got a single claim -- a single claimant, who wants to go into the state court has a right to go, is enjoined by a federal court to make --
Frank C. Mason: That's right, Your Honor.
Felix Frankfurter: -- that there is a difference --
Frank C. Mason: Oh, yes.
Felix Frankfurter: I'm not saying what the consequence --
Frank C. Mason: Yes, yes.
Felix Frankfurter: -- is of the difference, but there is a difference between many suits as in a single suit.
Frank C. Mason: All true, true. I followed down too and you'll see -- and these decisions which is cited by Judge Frank, Your Honor, that you'll find single claims, you will find a single claim with another claim comes -- coming in where the single claimants who had been there before would stipulate that that other claim be paid in full out of the fund in order that they would have their right, you see. And then, along came this case of -- of petitioner taxes, where there were number of claims and where the Court held, as I say, that you must and they take from Langnes against Green, this notion; that you just cannot take away the common law remedy by asserting that it will avoid a lot of litigation all over the country if I'm permitted to get that restraining order in limitation. That isn't good enough.
Felix Frankfurter: Isn't -- you would agree, wouldn't you, that this is different from any of those other cases. Those other cases may have presented the rule of the Second Circuit as you -- members of the admiralty law call it, presented a rule of the Second Circuit in its -- in its purity as it were named by the --
Frank C. Mason: Yes, sir.
Felix Frankfurter: -- whether you can use limitations for little piece purposes.
Frank C. Mason: That's right.
Felix Frankfurter: But this case is a different one, namely, or how that in other cases in which this situation arise only they've got two vessels?
Frank C. Mason: Now, it is a different case to that extent, Your Honor.
Felix Frankfurter: Well, have there been other cases of two vessels? You hope to gather as it were in a single collision or a single maritime event --
Frank C. Mason: You --
Felix Frankfurter: -- and then allocations sought to be made by the claimant against the two vessels in order to bring about an inadequacy of the fund?
Frank C. Mason: No. I would like to say this to Your Honor. You have used the word allocation --
Felix Frankfurter: Well that's what this is, isn't it?
Frank C. Mason: -- I think you've picked that up from my friend's brief or from his argument.
Felix Frankfurter: Well, I couldn't have picked it up from his brief because I haven't read it.
Frank C. Mason: Well, here is the difference --
Felix Frankfurter: Don't blame originality though --
Frank C. Mason: [Laughs]
Felix Frankfurter: -- I thought of the word as a familiar one.
Frank C. Mason: Here is the difference, and Mr. Underwood and I have had this out in the lower courts and in the Circuit Court three times now. When Mrs. Henn filed her original claim, it was for $250,000. When they contended that there were two separate funds here, as it happened, she said, “I have a claim against the tug petitioner for $100,000 and against the petitioner's barge owner for $450,000 and I'm sorry now that I didn't make that second claim, $130,000, because that would have kicked this whole picture out of shape. It was an allocation." And Judge Weinfeld said in his opinion, “She did not allocate her claim, she reduced her claim as against each vessel.”
Felix Frankfurter: I didn't know innuendo was carried by my word of allocation but the reality of the situation is that the proctors in this case did what lawyers are entitled to do, they dealt with the (Inaudible) the minority come within certain jurisdiction. Those are the requirements.
Frank C. Mason: That's right.
Felix Frankfurter: This is held and didn't sit down and say, “I got an -- I now realize that there are $150,000 against the tug and $100,000 against the barge if I subverts that she didn't do that?
Frank C. Mason: Oh no.
Felix Frankfurter: For lawyers that -- could her lawyers were there?
Frank C. Mason: Absolutely.
Felix Frankfurter: Come within decisions and the rules of law.
Frank C. Mason: That's true, Your Honor. And for this reason, she had in -- she had sitting in Ulster County a lawsuit which is still lying dormant there only because this petitioner got a restraining order preventing her from trying that case before them.
Felix Frankfurter: Well, we are here and you are here. You urged she wasn't entitled to get a restraining order?
Frank C. Mason: He got the restraining order.
Felix Frankfurter: I say that he wasn't entitled to get it.
Frank C. Mason: That's right.
Felix Frankfurter: And so that's the question of law so that --
Frank C. Mason: It is, Your Honor.
Felix Frankfurter: -- if it's entitled to it then she must be restrained. If she isn't entitled to do it, then she won't be.
Frank C. Mason: That's true, I -- I go along with that.
William J. Brennan, Jr.: Mr. Mason, one thing that puzzles me, how -- I gather the respondents claim is for damages, isn't it?
Frank C. Mason: Yes, sir.
William J. Brennan, Jr.: For the death of her husband? Now, I suppose that claim is worth X dollars, whatever the X dollars may ultimately prove to be.
Frank C. Mason: Yes, sir.
William J. Brennan, Jr.: Well she is worth -- entitled to her recovery only in the X dollars, that's the value of the claims, isn't it?
Frank C. Mason: That's right.
William J. Brennan, Jr.: I -- I don't quite understand how you divide that claim into X minus Y as against one vessel and make it Y as against the other vessel, how do you do that?
Frank C. Mason: Well, it sounds -- it sounds unusual, Your Honor, but you -- what you see and how -- what brought that about? If you see --
William J. Brennan, Jr.: I'm -- I'm not --
Frank C. Mason: No.
William J. Brennan, Jr.: I -- I know what brought that about, I've heard you say.
Frank C. Mason: Yes.
William J. Brennan, Jr.: I'm just interested how, as a matter of law, do you divide the claim in that?
Frank C. Mason: When the petitioner says there were two funds and I may have liability as a tug owner and I may have liability as a barge owner and her suit is pending in Ulster County against the petitioner charging frauds on the petitioner for frauds and -- of the person, owner tug and of the barge, the one against the barge being only with respect to inadequate light. Then, they, having made that contention naturally, Judge Weinfeld said, “All right, if she can bring her claims within the amount of each bond and the bond is taking the place of the vessel in a limitation proceeding, she then may -- may proceed with a state court suit and by a special verdict have it found whether or not, there is negligence on the petitioner's tug owner, its personnel or which personnel on -- on board of the barge and what her damages are." Now, it seems unusual that she is making a two separate claims against the petitioner for the one claim, the death of her husband too.
William J. Brennan, Jr.: Well, actually, she's putting one price tag on --
Frank C. Mason: That's true.
William J. Brennan, Jr.: -- on her death -- on the amount of her damages as against one vessel and another price tag on the other?
Frank C. Mason: That's -- that's --
William J. Brennan, Jr.: Because as I've always I understood it, she has a single claim for damages worth of X dollars.
Frank C. Mason: Well, I suppose that it might -- I might be criticized for the numbers I have picked, Your Honor. But I -- I -- (Voice Overlap)
William J. Brennan, Jr.: Yes, but can you -- I'm not neglecting any occurrences at all. I think Mr. Justice Frankfurter suggested what dominances --
Frank C. Mason: I see --
William J. Brennan, Jr.: -- the proper answer to that but I don't -- I -- I don't understand if this is a matter of law or how you divide up a single claim worth X dollars in that way?
Frank C. Mason: Well, Your Honor --
William J. Brennan, Jr.: But if for example they were not the same owner here.
Frank C. Mason: All right.
William J. Brennan, Jr.: That these were two different vessels, isn't that enough?
Frank C. Mason: Yes. I'll be glad to do that with you. Let's assume that it was Lake Tankers, as owner of the tug Eastern Cities, an X corporation which owned the barge. And each one filed a separate proceeding and each one put a bond on it, you see. And I decided to file a claim in this proceeding for $100,000 and I decide for purposes of my own to file one in this proceeding for $150,000. Now, I have only one claim, I only lost one husband, so to speak, you see. But still, I can file a claim in each proceeding as I go along and I may or may not be right in not making them same -- now with the same amount. Now, what the Circuit Court said here was; that since they were willing to treat in the District Court, this case --
William J. Brennan, Jr.: These two proceedings.
Frank C. Mason: -- as if there were two separate funds, they having propounded this theory --
William J. Brennan, Jr.: Well, you see what's bothering me goes deeper than that, I -- it would seem to me that there's a single claim upon which you put a price of $250,000.
Frank C. Mason: That's right.
William J. Brennan, Jr.: Now, why that isn't what you're required to assert in both proceedings even if they were separate proceedings is what I have difficulty following.
Frank C. Mason: Well, Your Honor, you say why -- we aren't required to do that. They -- in these cases, it has been permitted for claimants to reduce their claims, you see. And in the Trinidad case, which was handed down just two days before Judge Weinfeld decided this case lifting the restraining order, in the Trinidad case, they laid down a rule which should be followed with respect to these claimants who had reduced their claims. They had to unconditionally but partially release by a formal document, the petitioner for the difference between the claim as originally made and the reduced amount. They had to stipulate as we have had to do here that she may proceed in the state court suit only to judgment that she may not collect her judgment elsewhere than in this proceeding that she waives any right or claim of res judicata with respect to questions of limitation in the state court. That this court, the District Court, retains jurisdiction of the proceedings for all purposes against the event that the question of limitation should be raised by the respondent in the state court suit or the action takes some other form which would be repugnant to the federal question.
William J. Brennan, Jr.: Well, I suppose actually in the state court suit you have a recovery of $100,000.
Frank C. Mason: Yes, sir.
William J. Brennan, Jr.: In this instance, I suppose there's no problem whether you collect it out of the barge or out of the tug, the $100,000 is out of the same owner in any event.
Frank C. Mason: Yes, sir.
William J. Brennan, Jr.: But suppose you had, at least, two different owners and you have collected the $100,000.00 and you've done just what you've done here. How do you -- how do you collect the $100,000?
Frank C. Mason: Well --
William J. Brennan, Jr.: Do you take it all out of one and all out of the tug, for example, and forget the barge?
Frank C. Mason: I -- I think in the state courts, you could do that, you could --
William J. Brennan, Jr.: No, no, under the circumstances you have described for us that you can't do anything except collect now either the tug or on the barge, isn't that what you've said with the --
Frank C. Mason: I would file my claim in each proceeding in no doubt, the Southern District Admiralty Court having the two proceedings would control my --
William J. Brennan, Jr.: And divide up the damages --
Frank C. Mason: Yes, sir.
William J. Brennan, Jr.: -- as among -- between --
Frank C. Mason: Yes sir.
Felix Frankfurter: But they would merely have -- they would merely have the money of judgment.
Frank C. Mason: That's right.
Felix Frankfurter: All they would have --
Frank C. Mason: That's right.
Felix Frankfurter: What is your answer to Justice Brennan's question? How -- how do you determine, maybe allocation, how would you allocate the -- the viability for that $100,000 as between the two different owners?
Frank C. Mason: Well I -- I would assume, Your Honor, that the District Court would -- in -- in the handling of the fund say that if this fall around the part of both vessels and if there were two proceedings that those -- they should divide it evenly because even under your principles of admiralty law with respect to collision, where you have both to blame, the damages are divided. It amounts to the same thing, I think.
Felix Frankfurter: Wouldn't you have -- wouldn't some of the issues of liability be determined in the state court or under your common lawsuit? How could you recover except on some determination of liability?
Frank C. Mason: Well --
Felix Frankfurter: And would that be relitigated in the limitation proceeding?
Frank C. Mason: No. No, Your Honor.
Felix Frankfurter: Well then, what would be res judicata?
Frank C. Mason: The -- the question that we could not raise in the state court is seaworthiness or the privity or knowledge of the owner of the vessel, both of which are parental questions relating strictly to limitation, you see. We could never raise any question on that score. And in Langnes against Green, where this -- this Court having given him permission to go on with the state court suit, he, having them proceeded in the state court suit and having raised the question of limitation, seaworthiness, that having come to the Court's attention, the District Court's attention in Washington, it then issued the restraining order and gave him a time limit of about three days to stipulate that he was not going to raise that question again, then he sought mandamus in this Court to compel the District Court to comply with this Court's first decision and this Court said no, that he must leave limitation completely out of the state court suit. What they did assume, though, was that in the state court suit, it could be found -- there could be found the question of negligence of the defendant, petitioner. And they, also in that case, this Court said, it could be found what was the value of the tug, what was the value of the tug which is even further that we're asked -- asking this Court or the courts below to go.
Felix Frankfurter: Were there are two vessels in Langnes against Green?
Frank C. Mason: Just one.
Felix Frankfurter: Just one.
Frank C. Mason: Yes, sir.
Felix Frankfurter: Now, would -- I think I'll ask you this question but not as explicitly that I shall now. Do you think it would make -- would have made any difference or your position be in the slightest different if the two vessels had been surrendered rather than bonds posted?
Frank C. Mason: No.No, Your Honor. I think the bond is, as this Court has said so often and now this I have said; the bond only is a substitute for the vessel. And so, if the vessel were given in, it would be sold --
Felix Frankfurter: You couldn't say there were two funds, you could merely state the external facts of those, there were two vessels.
Frank C. Mason: That's right.
Felix Frankfurter: If you got two funds, then you might have two funds.
Frank C. Mason: That's right.
Felix Frankfurter: That you put in different banks into your --
Frank C. Mason: That's true.
Felix Frankfurter: If we have two vessels and that's merely the fact that there were two vessels here.
Frank C. Mason: That's right, Your Honor.
Earl Warren: Mr. Mason, does --
Frank C. Mason: Yes.
Earl Warren: -- does this finding of -- or -- or part of the order of Judge Weinfeld quoted in the opinion of the majority in this case answer to Mr. Justice Brennan's question as it appears on page 62 at the top there. It said we think, however, Judge Weinfeld's order should be amended to include the following, if claimant obtains a judgment in her state court suit for an amount in excess of $100,000, an injunction will issue permanently enjoining her from collecting such excess unless the judgment rest on a special verdict allocating the amount as between the libellant as owner of the tug and as owner of the barge, respectively. Thus, if the judgment exceeds $100,000 and the jury finds libellant liable solely as the owner of the tug, she will be enjoined from collecting any excess. If the jury finds that the libellant is liable solely as owner of the barge, she would be enjoined from collecting any amount in excess of $150,000.
Frank C. Mason: Yes, sir.
Earl Warren: Now is it your -- is it your position that that -- that that does state the limits of your recovery --
Frank C. Mason: Yes, Your Honor.
Earl Warren: -- and separates your recovery --
Frank C. Mason: Yes, sir.
Earl Warren: -- so that you can be ascertainable by --
Frank C. Mason: Yes.
Earl Warren: -- by an appellate court even?
Frank C. Mason: Yes, sir. I would like to say this, Your Honors, in conclusion. The -- as I see this case, very frankly, this respondent has made no effort throughout this litigation to take any right from this petitioner. His right thing -- the right to limit. She has made no effort to take his right to limit from him. On the other hand, in order to safeguard that right, there have been very formal stipulations, partial releases, provisions in the order and this additional provision which the Circuit Court has -- the Court of Appeals has suggested, all designed not to benefit this claimant or respondent but to safeguard this very sacred right of limitation. Now, then, I say to the Court in all frankness that while all that is going on, the petitioner, under the guise of claiming that concursus is such an important thing here, is in truth endeavoring to take from her, her sacred right to a common law trial before a jury in the form of her choice.
Felix Frankfurter: Too many sacred rights and --
Frank C. Mason: That's right.
Felix Frankfurter: -- and this case permit --
Frank C. Mason: But I think there is the distinction that I think the Court should recognize for this -- pardon me, Your Honor.
Speaker: Go ahead General, you're right.
Frank C. Mason: This -- this woman is not saying, “I want something which the Lord does not give me.” She is willing at every step of the way under these stipulations and releases to say, “I do not question the admiralty jurisdiction or the -- the Court's right to adjudicate the fund or this question of limitation and strictly in the admiralty court. All I want is the jury trial for which I started the suit way back in 1954 and I am willing to assign anything if I can get my jury trial.” But the petitioner keeps saying, “Not enough." Not enough. And he's had every safeguard that's entitled to it to preserve its right of limitation. And, therefore I say, that as in Langnes against Green, this Court said that once the District Court having weighed the equities in all fairness and justice, it would be an abuse of discretion not to grant this woman her jury trial insofar as the granting of that right may not harm this petitioner in its right of limitation.
Speaker: Supposing you ended up in the state courts with a general verdict for $100,000, what happens?
Frank C. Mason: Your Honor, I am -- I think then under the Circuit Court's provision, I can only get the $9000. I can't get any -- I can only get the $9000 but I -- I see what Your Honor is driving at that belief. You've heard the -- Judge Hinck's dissenting opinion.
Speaker: I have.
Frank C. Mason: And I -- and treating with that in the Circuit Court when the hearing on fund was had in the brief pointed at this, we have in New York, as Your Honor knows, those sections relating to special verdicts which means that in a proper case, an application can be made for the jury to make special findings on questions which you put to it. And that practice has been followed constantly in New York because the appellate court should recognize the value of special verdicts. In Langnes against Green, this Court recognized that there are certain questions which could be propounded in the state court and found in the state court. Judge Hincks felt that, as he put it, it is not altogether unlikely, he says, that the trial judge in the state court would refuse to propound questions of the jury under a special verdict. I don't think that's altogether the basis for denying this woman her right. I don't think it should be assumed that the state court will refuse to do what they have sections in their CPA just for that purpose. In other words, that I think the state court judge, and in line with the -- the Appellate Division decisions and Court of Appeals decisions would be much more inclined to have a special verdict brought in than a general verdict. I don't see any present reason why the state court judge would decline to have the jury thing under special verdict.
Speaker: Suppose -- suppose in the state court judge took the position that as he saw the issues in this case, it's an in personam action. You can't split this thing up that way and since the federal court is in effect said under your stipulation that if he gets a judgment of that kind, you get a judgment of that kind in the state court. It can't be enforced, where does that leave the state court?
Frank C. Mason: Well, we can't enforce it in a state court, Your Honor. No.
Speaker: You can't enforce it anywhere.
Frank C. Mason: Oh, I think we couldn't bring it into the limitation proceeding, I think we could. I -- I think my --
Speaker: I thought you -- I thought that Judge Frank had added a paragraph to the stipulation and said; “If you go to general verdict, why is then you weren't enforcing it against either?”
Frank C. Mason: The appointment obtains a judgment in her state court sued for an amount in excess of $100,000. An injunction will issue permanently enjoining her from collecting any such excess unless the judgment versed on it's special verdict allocating the amount as between the libellant as owner of the tug and as owner of the barge. But -- I think, Your Honor, that Judge Hincks has unduly exercised about this question whether a state court trial judge would decline to have a jury being in a special verdict. That is looking for the exception rather than the rule. Now, even this morning, in the library here, I went looking to and find cases and you'll find it in New York County specially where there are land vehicles, automobiles, and trucks involved where there were these special verdicts brought in, not that the jury knows it but because of the difference in the insurance coverage on the vehicles. And one case I've read here this morning was a case Upstate New York where a man was killed by a collision between a car and a truck. The jury listened to the story of each of the drivers and if what they said was so; there was no collision, apparently, although, a man was killed. Each one had a -- diametrically opposed version. In that case, the trial judge permitted the jury to bring in a general verdict. And that case was reversed and sent back and the judge was criticized for not having used a special verdict provision of the Act because both versions being so directly opposed to each other. It pointed that a special verdict would have given the answer to the question; who really was at fault? In that case, both defendants were held by the jury. Well, I think on the --
Felix Frankfurter: Mr. Mason, you seem to get a great deal of comfort out of Langnes against Green?
Frank C. Mason: Yes, sir.
Felix Frankfurter: I've just reread it to refresh my recollections, of course, in case, one would -- knows to be well. Why do you get so much comfort out of that case? That was a one claim case in which there was some lingering, some remote speculative nonexistent fear there might be other claimants, why does that -- what does that -- how does that help me in this case?
Frank C. Mason: The language, Your Honor.
Felix Frankfurter: Well, I get nothing out of the language except insistence. There's only one claim.
Frank C. Mason: Well, there is only one --
Felix Frankfurter: Why is that language help me any in this case?
Frank C. Mason: There -- there is only one -- that language only helps me to this extent, Your Honor, and the latter too.
Felix Frankfurter: And that speaks of the language. I haven't refreshed. (Voice Overlap)
Frank C. Mason: That -- that here we must recognize two rights of opposing --
Felix Frankfurter: Well, I grant you all that but that doesn't help me to decide which right to prevail. This is a -- Mr. Underwood, I have to get her idea to call attention to comparable problems in the domain of diversity jurisdiction. We talked about sacred and sacred and I think that just clouds the atmosphere.
Frank C. Mason: Oh I don't mean --
Felix Frankfurter: The fact of the matter is that these are jurisdictional situation, and the question is whether the conflict you gave it to which is reasonably within the purport of the statute and claimant keeps stock out of the federal courts by reducing their claims and if diversity jurisdiction should be hiked up to $10,000, people will reduce their claims now to $9000 and that's all right, and why do they do that? That's what this is. And now, here, we certainly, there wouldn't be a problem if there -- if you couldn't go in to the state courts in a situation like this, there wouldn't be a problem at all. You can go. All I'm saying -- I'm not saying you're not right. All I'm saying is I get nothing out of Langnes against Green that help me with the slightest.
Frank C. Mason: What you want a -- an answer to -- the slightest problem, the proposition that Mr. Underwood suggests or proposes that concursus does not depend upon an inadequate fund. I can't see how this Court could ever ever extend the intent of the limitation act this day and age to include a situation where there being an adequate fund, the ceiling being high enough that without regard to that, a shipowner is entitled to file a petition in limitation and compel all these common law suitors to come into admiralty and have their suits tried there.
Felix Frankfurter: I suggest, Mr. Mason, that one does not have to decide that question in this case.
Frank C. Mason: Well, I think that was my friend's principal point rather. I -- I would like to leave this one the last, though, if the Court please. On the question whether or not concursus in those two sections having to do with concursus are so important or that whether they have the primary purpose of the statute, the old case of White against Island Transportation Company at 233 U.S.346, that was a single claim. It was one where the woman contended that you couldn't have limitation unless there was more than one claim. And she based that on the theory that these two sections which were then -- then known as 4284 and 4025, we've -- we've referred to a plurality of claims, and therefore, we had a single thing it couldn't have limitation. But the point I want to make is that in that case, this Court said, that the dominant statute in limitation is 4283 which says that a man may limit his liability to the value of his interest in the vessel and said, the succeeding sections are in the nature of an appendix and relate to proceedings by which the first is to be made effective.
Felix Frankfurter: I don't think that's in your brief. Would you mind giving me the citation?
Frank C. Mason: At 233 U.S., White against Island Transportation Corp. 233 U.S., 346, Your Honor.
Hugo L. Black: Mr. Mason. I would like to ask you a question. Outside of the possibility that the jury might give a legal verdict and the judge would give an adequate, is there any possibility that the -- these shipowners here would have to pay out anymore under the orders of the Court here now by reason of the fact that there are two boats instead of one upon anything else?
Frank C. Mason: No, sir.
Hugo L. Black: Is there -- is there any -- any reason why they would have to pay out more?
Frank C. Mason: No, sir.
Hugo L. Black: Because if then they would, if there were only one claimant?
Frank C. Mason: They, in the present state of the case I think, Your Honor, by -- by the lifting of the restraining order they wouldn't have to pay anymore out because just $9500 and so forth claims left in the limitation proceeding to be adjudicated there but --
Hugo L. Black: Under the orders of the Court, has there now any existence as to how this would be held under the order of the Court of Appeals? The question I have in mind is the shipowner here, the owner of the two boats, the tug with the tug and barge, is there any possibility that he is going to have to pay out more than the amount fixed as to them -- as an entity?
Frank C. Mason: No, sir.
Hugo L. Black: And is that bound to be and either of the event less than the value of the barge and the tub?
Frank C. Mason: That's right.
Hugo L. Black: Under the orders of the Court?
Frank C. Mason: Yes, sir.
Felix Frankfurter: Not if he does not -- you were asked if they were one vessel instead of two, if there were one vessel against two, the problem wouldn't arise because then the claims would exceed the fund, is that right?
Frank C. Mason: No, Your Honor. The -- I don't see how the claims could exceed the fund if --
Felix Frankfurter: The way before you distributed them or whatever word you choose to call as to allocate that the fund was -- that wasn't sufficient?
Frank C. Mason: Oh, well if Your Honor is going back to --
Felix Frankfurter: I'm suggesting if there were claims merely asserted against with single vessel in this case, the word of the -- the amount of the claims would exceed the amount of every worth for the vessel.
Frank C. Mason: Adding up the number in the lawsuits against the amount of the barge.
Felix Frankfurter: The way you started -- the way you started, yes adding them up together, it would, wouldn't they?
Frank C. Mason: Yes. That's true, Your Honor.
Felix Frankfurter: All right.
Hugo L. Black: Well, what did you say they were doing?
Frank C. Mason: I say if you were to add up, Your Honor, the amounts of these -- amounts stated in the lawsuits, you see?
Hugo L. Black: Amount stated in the lawsuits?
Frank C. Mason: In the lawsuits but we are beyond that point for the reason --
Hugo L. Black: You are the same now, are you not, as though you had sued the Court in diversity of jurisdiction for $2999.99?
Frank C. Mason: That's right.
Hugo L. Black: You couldn't get anymore than that?
Frank C. Mason: That's right.
Felix Frankfurter: But you didn't start that way. Is it --
Hugo L. Black: They have -- they have barred you now, haven't they?
Frank C. Mason: That's right.
Hugo L. Black: If you find anything in the limitation of statute that indicate that an owner of two boats in an accident is anymore than decided to get rid of the jury trial then the owner of one boat?
Frank C. Mason: No, sir, I do not. My point there --
Hugo L. Black: When he comes to any more damages because it's a -- there are two boats involved in it and because they want it?
Frank C. Mason: No, I figured, you see --
Felix Frankfurter: The jurisdiction of a court doesn't depend on who suffered, the jurisdiction of a court depend on what statutes allow.
Frank C. Mason: That's true, Your Honor.
Hugo L. Black: And that depends on how the Court construes it.
Frank C. Mason: That's right. Thank you very much, Your Honor.
Earl Warren: Mr. Underwood.
Eugene Underwood: May I address myself first to Mr. Justice Black's question, I'd like to answer that, I'm afraid a little differently than Mr. Mason did. If Your Honor please, I think there's a very real danger and a very real difference. Let's look at what may happen in the state court. Under the relaxation of the restraining order, this respondent can sue in the state court and let us assume for the moment that the state court will adopt the special verdict suggestion. I see no reason why it should because it doesn't have anything to do with the liability in the state court but let's suppose it does. The Court of Appeals and Judge Weinfeld visualized a determination by the state court that either the tug or the barge or both was at fault. Well, let's suppose that the state court; the jury finds that they're both at fault then they get a judgment for whatever the jury fixes up to $250,000 and they bring that back to the limitation proceeding, as they must do under the restraining order and under the stipulation that the Court of Appeals made this respondent sign. But that decision, as to the liability of this petitioner as tug owner or barge owner, cannot be binding on the admiralty court because the limitation fund is measured by the in rem liability of tug or barge and it is conceded by this respondent in -- in her brief that only the admiralty court can decide that. And that is a necessary concession because this Court has so held. Therefore, it can very well cost us more in either one of two ways if we have to go to the state court and try the case. Again, if the state court holds us liable because of some fault of tug and barge, they -- either they can recover on that in which case, it would cost us more than if the admiralty court holds only one vessel or it's entirely fruitless, meaningless, null, and void in every sense because only the admiralty court can decide which of these vessels is at fault. That is so inherent, so basic, so interwoven in the whole concept of limitation of liability that my friend concedes and this Court has held, other courts have held that that must be determined and can only be determined by the admiralty court. So, she tries a case in the state court and gets a judgment based upon the fault of both, she has to bring it back to the admiralty court and it's no good in the admiralty court because only the admiralty court can decide whether tug is at fault and whether barge is at fault.
Hugo L. Black: What is the limitation -- what is the amount of the claim that the admiralty court as it barred them to accept as enough against the -- for the debts of these people, what is the amount?
Eugene Underwood: I'm not quite sure that I understand Your Honors question.
Hugo L. Black: What I mean is this and I understand --
Eugene Underwood: The aggregate of claims of --
Hugo L. Black: -- that they have reduced the amount or that they originally claim from something to something.
Eugene Underwood: $259,000.
Hugo L. Black: $259,000.
Eugene Underwood: Yes, sir.
Hugo L. Black: Can they -- is it possible for them to get any more than that?
Eugene Underwood: No.
Hugo L. Black: Either -- if they try the case before jury or if they try the case before admiralty court?
Eugene Underwood: Not now.
Hugo L. Black: And if that is the amount of damages that the -- these people have suffered, I suppose you would agree that they're entitled to recover that money if it should be found that that's the amount they --
Eugene Underwood: If it -- if it should be found that the tug and barge are both liable.
Hugo L. Black: Now --
Eugene Underwood: But if Your Honor please, you see the value of each vessel is less than that so let us suppose that only the tug is liable --
Hugo L. Black: Who owned -- who owned both vessels?
Eugene Underwood: Same company, this petitioner.
Hugo L. Black: Same company and will that company -- does that company stand a little to a dime more unless the jury gives more by having the case tried at the state court --
Eugene Underwood: Yes.
Hugo L. Black: -- than in the federal court?
Eugene Underwood: Yes.
Hugo L. Black: Can it lose any more than $259,000?
Eugene Underwood: No, but it can lose more than the value of the tug if the federal court should hold that only the tug is liable, it could lose more than the value of the tug if the jury brings in a verdict of $250,000 and the federal court holds that only the tug is liable, then we're entitled to limit our liability to $110,000. But if you enforce the state court judgment for $250,000, it cost us what is on (Voice Overlap)
Hugo L. Black: What point does the Court order provided but what does the courts order provided up there?
Eugene Underwood: The courts order provides that if the recovery is for more -- in the state court is for more than $100,000, you got to take it back to the admiralty court --
Hugo L. Black: And then what --
Eugene Underwood: You've got to take it back to the admiralty court anyway.
Hugo L. Black: What does it provide the admiralty courts cant do?
Eugene Underwood: It provides that -- it can't the -- this respondent cannot recover more than -- I'm -- I'm glad to see, Your Honor, I'd much rather have you refer to the record than trust my memory at this state. I think she cannot get more than $100,000.00 unless it's based upon a special verdict which --
Hugo L. Black: Well is there any chance that she could get any -- that you could get out any less than that in the admiralty court unless the admiralty judges happen to give a less verdict?
Eugene Underwood: Yes, the admiralty court might very well hold near these vessels at fault. We haven't told you what the facts are in this case but --
Hugo L. Black: Well I'm not talking about the facts, I'm talking about aside from the desire to escape the jury verdict. Let's get away from that just a moment what --
Eugene Underwood: If Your Honor please --
Hugo L. Black: What law, you say $100,000 is the maximum that they can -- they can -- admiralty court will give in some circumstances.
Eugene Underwood: Oh no. Oh no, no. There's no limit to what the admiralty court will give if it's persuaded of the damages and if it holds that there's no limitation. I say to you this, --
Hugo L. Black: Well, they couldn't give anymore under the order here that they have fixed for these people to recover.
Eugene Underwood: They could give --
Hugo L. Black: And if its order -- if the Court of Appeals orders a sustain I'm talking about --
Eugene Underwood: They could limit -- the admiralty court could limit our liability to $110,000.
Hugo L. Black: Well what has the Circuit Court of Appeals said it had to be limited to --
Eugene Underwood: The -- the Court of Appeals hasn't decided any question of limitation of liability.
Hugo L. Black: What did you mean by saying the $100,000 is all they could get?
Eugene Underwood: In the -- in the stipulation that the Court of Appeals suggested that these people, this respondent be required to make, it says in effect, as I recall it, that she cannot recover more than $100,000 unless state court verdict is a special verdict and allocates the amount between tug and barge.
Hugo L. Black: Is that what the admiralty court would do?
Eugene Underwood: I don't know what the admiralty court would do because --
Hugo L. Black: Well, if they held that both were liable, would they allocate it?
Eugene Underwood: Oh, if they held that both were liable, there'd be no need for an allocation because then the fund would exceed the claims. It's unimportant to allocate if both are liable but you can't tell until after trial.
Hugo L. Black: I -- I can't cant get quite -- are you claiming that under the order of the Court of Appeals, it is possible under any circumstances for these petitioners to get a dollar more -- a dollar more, or at least as much as the fund which has been found to be any different.
Eugene Underwood: I'm claiming, if I may answer your question this way, either one or two things, either it is possible or the whole state court proceeding must be entirely nugatory, because if the state court verdict is for more than $110,000, that being the value of the tug, either she can recover the excess or not but if the federal court in admiralty says that the barge is not liable and limits our liability to the tug, her -- the limit of her recovery would be her share of $110,000.
Hugo L. Black: Suppose the state court held that there was no liability on the part of the judge just as you said if the admiralty held, what could be the result then?
Eugene Underwood: Well, if Your Honor please, that illustrates, I think, one of vices of trying to unscramble these eggs. The Court has made her waive all claim of res judicata with respect to anything that relates to the limitation of liability, but we are not under any such impediment.
Hugo L. Black: But it doesn't hurt the company that she's been compelled to reduce it, does it?
Eugene Underwood: No, if the jury should bring in a verdict, and I can't visualize this, but if a jury should bring in credit for the defendant, that would be res judicata. Well I -- I think the light was shining, I've had several other things to say.
Earl Warren: You have five minutes. So --
Eugene Underwood: Thank you.
Earl Warren: -- the red light to (Voice Overlap).
Eugene Underwood: Thank you, sir. I would like to mention now one thing. This is -- this is definitely a -- a single proceeding. The petition beginning on -- on page 4 of the record in this case, if I may read a little bit of it to you, petitioner claims exemption from liability for the losses, damages, injuries and destruction occasioned or encouraged by or resulting from the aforesaid collision and losses and for the claims for damages that have been or may here be made and the petitioner alleges that it has valid defense as thereto on the facts and the law. That is we filed this petition as one single solitary proceeding on behalf of one vessel owner who happened to own two vessels. We pleaded the common ownership of both, we pleaded that both were seaworthy, we pleaded that we weren't liable for either, we pleaded that if we were, we were entitled to limitation of liability, and we gave bond only for the one because under this Court's decisions, only the one that's the controlling factor and that fault in rem is liable and we saw no possible way by which this barge could be held at fault. And at that time, and I cannot say this too earnestly, there was no claim by this respondent that the barge was guilty of any fault of her own. I made that point, I think, the first point in my reply brief. Even so, we anticipated the possibility that there might be such a claim and in our petition, we -- we offered not only an interim stipulation for the value of the tug but we've also offered an interim stipulation for such additional interest as may be appropriate whenever the same shall be ordered by the Court.Therefore, by those words, I drew those words. We intended to offer a stipulation for the barge if at some future time, it should become necessary in the judgment of the Court. So that this was one solitary proceeding and was intended to such in the beginning. Now, there were not ever two funds and it has never been my position that there are two funds in this case. It may be that I used a little inadvertent language in a brief that I wrote in -- in the District Court, there were two funds only in the sense that there were two different stipulations but my argument to Judge Weinfeld was that there was not yet any fund as indeed is still true, there is not yet any fund, we don't know what the fund is going to be. At the moment, there is only security, two separate pieces of paper, it's true. But the security is for the value of the two. You can't tell what fund will -- what the fund will be until there has been a trial under merits and that can only be in the admiralty because only the admiralty can determine which of the vessels is liable in rem, state courts are incompetent to do that. I think that concludes my argument except for one thing. I'd like to express my final review on this question of concursus. It is not necessary in this case to go the whole way and say that concursus alone is enough. I -- in my brief suggested that it would be a workable rule in this cases as in the diversity cases to test the good faith of the petitioner when he files his petition, if at that time the claims are real and in good faith he apprehends the need for a concursus then he is entitled to file his petition and the jurisdiction of the Court should not thereafter be the football be at the whim of these claimants in reducing their claims.
Hugo L. Black: No, it shouldn't be a dilemma to the petitioner, should it?
Eugene Underwood: Oh I agree, not.
Hugo L. Black: Do you think that that is?
Eugene Underwood: I agree not. Of course not. Thank you very much.