Opinion ID: 1542328
Heading Depth: 1
Heading Rank: 1

Heading: Towage Contracts.

Text: This court has held that a contract relieving a towing vessel from the results of its negligence is void and has based its decisions upon the decision of the Supreme Court in 1870, in the case of The Steamer Syracuse, 12 Wall. 167, 79 U.S. 167, 20 L. Ed. 382. In Alaska Commercial Co. v. Williams, 9 Cir., 128 F. 362, decided in 1904, we held, as stated in the syllabus: A towing vessel cannot relieve itself by contract from liability for the failure to exercise reasonable care and skill in the performance of the service and for the safety of the tow. This court, in Mylroie v. British Columbia, etc., 9 Cir., 1920, 268 F. 449, and in Sacramento Nav. Co. v. Salz, 9 Cir., 3 F.2d 759, 761, adhered to the view expressed in our earlier decision, Alaska Commercial Co. v. Williams, 9 Cir., 128 F. 362, supra. On the other hand the Circuit Court of Appeals for the Second Circuit has consistently held such contracts valid. The Cutchoque, 2 Cir., 10 F.2d 671. The Court of Appeals of the State of New York, Graves v. Davis, March 23, 1923, 235 N.Y. 315, 139 N.E. 280, 281, held that such a contract limiting the liability of the tug was valid. The court said: A tug is not a common carrier of the tow. The owners of a tug may restrict their liability by special agreement. No rule of public policy is involved. The District Court of the Eastern District of New York in 1938, The Melvin and Mary, 23 F.Supp. 398, 400, held an agreement exempting the tugboat from liability was valid. Such an agreement has been upheld and found to be binding upon the parties making the same. Two decisions by the District Court for the Eastern District of New York are cited in support of this conclusion; The Primrose, 1933, 3 F. Supp. 267; and The John J. Feeney, 3 F. Supp. 270. In The Primrose, supra, it was held that the owner of the tug could exempt itself from liability for his own negligence and did so by the following phrase in the contract: It is agreed that all risks of damage, loss, or expense to the barges named herein, howsoever caused, occurring during the currency of this agreement shall be assumed by the party of the second part. [3 F.Supp. 268.] The judge said that the law had been so firmly established in the Second Circuit that the Navegacion case, Compania de Navegacion v. Phoenix Ins. Co., 277 U.S. 66, 48 S.Ct. 459, 72 L.Ed. 787, should not be held to change the rule. In the Feeney case, supra, decided by the same judge the same day, (3 F.Supp. 270) a contract providing that the barge owners assumed all risk of damage, loss and expense, was held to be a waiver of any claim for damages for negligence. The Supreme Court has unquestionably settled this difference in Compania de Navegacion v. Phoenix Ins. Co., 277 U.S. 66, 48 S.Ct. 459, 72 L.Ed. 787, where, as stated in the syllabus, it was held that a clause in a towage contract declaring that the towing boat shall not be responsible in any way for loss or damage to the tow, does not release the former from loss or damage due to the negligence of her master or crew. If these decisions of the Supreme Court and of this court are applicable to a maritime contract to repair a ship it is clear that such a contract to exculpate the contractor for his negligence is invalid. But there are other decisions involving contracts exculpating a party from the results of his negligence which are cited as analogous and, consequently, as bearing upon the question. In Sun Oil Co. v. Dalzell Co., 1932, 287 U.S. 291, 53 S.Ct. 135, 136, 77 L.Ed. 311, the question involved had to do with a contract of towage wherein it was provided that where the towed vessel uses her own propelling power and the captain of the towing tugboat went aboard the tow to pilot it, he then became the servant of the owners of the tow, consequently, the owners of the tugboat were not liable for damages resulting from his negligence. The court held this provision valid. It is said so far as concerns the service to be rendered under the agreement, respondent was not a common carrier or bailee or bound to serve or liable as such. Towage does not involve bailment, and the services covered by the contract were less than towage.    There is no foundation in this case for the application of the doctrine that common carriers and others under like duty to serve the public according to their capacity and the terms of their undertaking cannot by any form of agreement secure exemption from liability for loss or damage caused by their own negligence. New York C. Railroad Co. v. Lockwood, 17 Wall. 357, 21 L.Ed. 627; Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 129 U. S. 397, 440, 9 S.Ct. 469, 32 L.Ed. 788. It is stated by the court that its holding was in no wise in conflict with the Syracuse case, supra, or the Navegacion case, 277 U.S. 66, 48 S.Ct. 459, 72 L.Ed. 787, supra, because neither involved an agreement similar to the provisions of the pilotage clause on which this case turns. The Supreme Court, in a number of cases in which the parties did not occupy the relation of bailee or common carrier, has upheld the validity of contracts between the parties exculpating one of them from the results of his negligence. Accordingly, in Santa Fe, etc., Ry. v. Grant Bros. Co., 1913, 228 U.S. 177, 33 S.Ct. 474, 477, 57 L. Ed. 787, supra, it upheld the validity of such a contract. While the court reaffirmed the doctrine that a common carrier cannot secure immunity from liability for its negligence by any sort of a stipulation it said that the rule extends no further than the reason for it. It is apparent that there may be special engagements which are not embraced within its duty as a common carrier, although their performance may incidentally involve the actual transportation of persons and things, whose carriage in other circumstances might be within its public obligation. A similar conclusion was reached in Baltimore & Ohio, etc., Ry. Co. v. Voigt, 176 U.S. 498, 20 S.Ct. 385, 387, 44 L.Ed. 560, in relation to the right of the Railroad Company to thus protect itself from claims for damages resulting from injuries negligently inflicted upon an employee of an express company who was being transported in the performance of his duty under contract between the Railway Company and the Express Company which exempted the company from claims for damages from injuries negligently inflicted upon such employees. The employee had also stipulated with the Express Company that he assume the risks of all expense and injuries which he might sustain in the course of his employment whether occasioned by negligence or otherwise. The court, after referring to the cases previously decided by it denying the right of a common carrier to make such a contract with relation to persons or property transported in such capacity, said: The principles declared in those cases are salutary, and we have no disposition to depart from them. At the same time it must not be forgotten that the right of private contract is no small part of the liberty of the citizen, and that the usual and most important function of courts of justice is rather to maintain and enforce contracts than to enable parties thereto to escape from their obligation on the pretext of public policy, unless it clearly appear that they contravene public right or the public welfare. The same ruling was made by the Supreme Court in a case involving injuries to the employees of the Pullman Company being transported in pursuance of their duty and special contract between the Railway Company and the Pullman Company. Robinson v. Baltimore & Ohio R. R. Co., 237 U.S. 84, 35 S.Ct. 491, 492, 59 L. Ed. 849. The court said: It is also clear that, unless condemned by statute, the contract was a valid one and a bar to recovery. Citing, Baltimore & O. Ry. v. Voigt, supra, Sante Fe, etc., Ry. v. Grant Bros. Co., supra. It was held that as the Pullman porter who was injured was not in the employ of the Railway Company and, consequently, not affected by § 5 of the Employers' Liability Act, § 5, ch. 149, 35 Stat. 65, 45 U.S. C.A. § 55, that the contract between the Pullman Company and the Railway Company exculpated the Railway Company from damage for injuries to the employees of the Pullman Company resulting from the negligence of the Railway Company was valid. In Ringling Bros., etc., Shows v. Olvera, 119 F.2d 584, 587, decided by this court May 2, 1941, opinion by Judge Denman, it was held that the parties to a contract could exculpate one of them from the effect of his negligence for which he would be liable under the common law. The court said: The United States Supreme Court, in determining the common law with regard to such agreements, before Erie Railway v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188, 114 A.L.R. 1487, has held that, though negligence is not mentioned in the exempting clauses, such broad provisions going to the essence of liability as `all risk of loss or damage', `at consignee's risk of loss and damage', `all risk of accident to person and baggage', and `no obligation or risk in case of accident or damage to men and supplies' relieve from liability for ordinary negligence a railroad company contracting in its private and not public service capacity. Santa Fe Ry. v. Grant Bros., 228 U.S. 177, 188-194, 33 S.Ct. 474, 478, 57 L.Ed. 787. There is a large number of cases cited in footnote No. 4 in which this rule is applied. This court accordingly held that a contract between the plaintiff who claimed to have been injured while performing on the trapeze in the Ringling circus and the proprietor of the circus whereby it was exempted from responsibility for injuries resulting from its negligence, was a valid contract. The rule is thus stated in Restatement of the Law, Contracts, ch. 18, p. 1079, § 574: A bargain for exemptions from liability for the consequences of negligence not falling greatly below the standard established by law for the protection of others against unreasonable risk of harm, is legal except in the cases stated in § 575. The applicable portion of § 575 referred to as excepted is subdivision (b) where: (b) one of the parties is charged with a duty of public service, and the bargain relates to negligence in the performance of any part of its duty to the public, for which it has received or been promised compensation. It follows from the foregoing authorities that a contract exempting one of the parties thereto from the results of his negligence is legal unless public policy forbid such contract. The question under this rule of general law, then, is whether or not there is a duty of public service which affects the validity of the contract because to sustain its validity would excuse the negligent party from the performance of a part of its duty to the public for which it had received, or been promised, compensation. We think not. Here the parties were free to contract in any manner they chose. The Motor Car Company was in no sense a public utility or charged with a public duty. The shipowner was at liberty to select any vendor of engines to replace the old engine, and to employ the seller or anyone else to install it. If we follow the decision of the Fourth Circuit Court of Appeals in the case of the Newport News Shipbuilding & Dry Dock Co. v. United States, supra, in dealing with a maritime contract we will sustain the validity of such a contract provision. The decisions relied upon by that court and the Supreme Court decisions we have cited and discussed above indicate that with the exception of common carriers dealing with goods or persons being transported as such common carrier and contracts for towage, the right of private persons to contract as they please will be sustained by the federal courts.