Court Opinion

ID: 9448928
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:50:00.526764+00
Date Added: 2024-06-11T17:31:37.010287
License: Public Domain

JERTBERG, Circuit Judge
(dissenting).
I respectfully dissent. I do so only because of my view that the opinion of my brethren reaches a wrong result in an important and unsettled area of Admiralty law and one which will have far-reaching consequences.
The majority members of the panel conclude that the warranty of workmanlike service could not have been breached without some negligence on the part of the Stevedoring Company and found it unnecessary to decide whether the district court was correct in holding that the express contract clause indemnifying for negligence precluded any implied warranty.
Since I believe that the district court’s dismissal of appellant’s libel should be set aside and the cause remanded to the district court with instructions to enter judgment in its favor against appellee for the amount of the indemnity sought, it becomes necessary for me to first consider the issue not passed upon in the majority opinion.
The Seattle hatch tent and tent tie-down rope involved were owned, supplied, rigged and exclusively controlled by appellee. The rope in question was permanently spliced to an eye in the tent. At the time of the accident, Griffith and his work partner had passed the rope through a deck fixture and back up and through the splice by which the rope was permanently attached to the tent. Griffith was pulling on the free end of the rope when it broke. It broke between the point where Griffith was holding it and the point where it ran through the splice. The securing of the tent and the manner in which the tent and tent rope were being secured were entirely and exclusively within the supervision and control of appellee. When the rope broke it was being used for the purpose and in the manner for which it was supplied by appellee for use by its employees. The rope was a proper type of rope for use as a tent rope and there was no evidence that it was in an unsatisfactory condition. When the rope broke it was defective and unsatisfactory for the purpose for which it was intended.
The provisions of the stevedoring contract existing between appellant and ap-pellee which are relevant and pertinent on this appeal provide:
“(a) That the Stevedoring Company will act as stevedores, and that they will with all possible dispatch, load and/or discharge all cargoes of vessels owned, chartered, controlled, or managed by the Steamship Company at all Columbia and Willamette River ports as directed. And it is agreed that the Steamship Company will grant to the said Stevedoring Company the exclusive rights of handling all such cargoes as before mentioned under the terms of this agreement, and will pay for the work done by the Stevedoring Company in lawful money of the United States at the rates set forth in Schedule ‘A,’ attached hereto and made a part hereof;
“(b) That the Stevedoring Company will furnish all necessary labor and supervision and all ordinary gear for the performance of the services described in this contract, including winch drivers and usual appliances used for stevedoring;
*489“(c) That the Steamship Company will furnish suitable booms, winches, blocks, and falls, steam and/or power and lights and will maintain the same in safe and efficient working conditions during the progress of the work; and
“(d) That the Stevedoring Company will be responsible for damage to the ship and its equipment, and for damage to cargo or loss of cargo overside, and for injury to or death of any person caused by its negligence * * *. The Steam-
ship Company shall be responsible for injury to or death of any person or for any damage to or loss of property arising through the negligence of the Steamship Company or any of its agents or employees, or by reason of the failure of ship’s gear and/or equipment.”
I shall first consider appellee’s contention that appellant’s right to indemnity must be determined from the provisions of the written stevedoring contract. Ap-pellee argues that since the contract provides that appellee shall be responsible “for injury to or death of any person caused by its negligence” and since the district court found that appellee was not negligent in furnishing the defective rope, the decree of the district court dismissing appellant’s libel must be affirmed.
The district court found that “there is no evidence, outside of the written contract itself, as to the intent of the parties with respect to construction or interpretation of the stevedoring contract, or with respect to implied obligations under said contract.” Thus, there is presented as a question of law whether under the contract the liability of appellee is limited to negligence and thereby negatives the existence of any obligation on the part of appellee to perform the stevedoring services in a workmanlike manner.
Was appellee under an obligation to render workmanlike service to appellant under the terms of the contract? It is to be noted that appellee agreed to act as stevedore and to load and discharge all cargoes of vessels owned, controlled, or managed by appellee at Columbia and Willamette River ports as directed. It is also to be noted that the contract does not contain an express agreement of indemnity unless the last quoted provision of the contract, properly construed, limits the liability of appellee to its negligence and bars indemnity.
Since the decision of the Supreme Court in Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship Corp., 350 U.S. 124, 76 S.Ct. 232 (1956), absent an express agreement of indemnity, it has been settled law that an agreement between a shipowner and a stevedore to perform loading and discharging of cargo includes the implied-in-fact obligation to render workmanlike service. In Ryan, a stevedoring company agreed to perform stevedoring services for the shipowner. The agreement was evidenced by letters, but without a formal stevedoring contract or an express indemnity agreement. One of the members of the stevedoring company was injured during the unloading. A jury returned a verdict for the longshoreman against the shipowner. The shipowner had impleaded the stevedoring company claiming that it was entitled to full indemnity because the stevedoring company had negligently failed to stow the cargo in a safe and proper manner which negligence caused the shipowner to be liable to the longshoreman. The Court held that the shipowner was entitled to indemnity based on the stevedoring company’s breach of its implied warranty of workmanlike service. In the course of its opinion, the Court stated, at p. 133, 76 S.Ct. at p. 237:
“The shipowner here holds petitioner’s uncontroverted agreement to perform all of the shipowner’s stevedoring operations at the time and place where the cargo in question was loaded. That agreement necessarily includes petitioner’s obligation not only to stow the pulp rolls, but to stow them properly and safely. Competency and safety of
*490stowage are inescapable elements of the service undertaken.”
In Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563, 78 S.Ct. 438 (1958), the Supreme Court held that it was error to take a case from the jury on the question of indemnity where there was evidence tending to establish negligence on the part of the stevedoring company even though the shipowner had been held liable to the longshoreman only on the basis of negligence and not for unseaworthiness of the vessel. The stevedor-ing contract contained no express indemnity clause. The Supreme Court held that the stevedoring company’s implied-in-fact contractual obligation to perform its duties with reasonable safety embraced not only the handling of cargo but the use by the stevedore of ship’s gear. In the course of its opinion, the Court stated, at p. 567, 78 S.Ct. at p. 441:
“We believe that respondent’s [stevedoring company] contractual obligation to perform its duties with reasonable safety related not only to the handling of cargo, as in Ryan, but also to the use of equipment incidental thereto, such as the winch shelter involved here.”
The implied-in-fact obligation of the stevedore to render service in a workmanlike manner is not based upon tort. As stated by the Supreme Court in Ryan, supra, 350 U.S. at p. 133, 76 S.Ct. at p. 237:
“This obligation is not a quasi-contractual obligation implied in law or arising out of a noncontractual relationship. It is of the essence of petitioner’s stevedoring contract. It is petitioner’s warranty of workmanlike service that is comparable to a manufacturer’s warranty of the soundness of its manufactured product. The shipowner’s action is not changed from one for a breach of contract to one for a tort simply because recovery may turn upon the standard of the performance of petitioner’s stevedoring service.”
In Crumady v. The J. H. Fisser, 358 U.S. 423, at pp. 428-429, 79 S.Ct. 445 at p. 448 (1959), the Supreme Court stated:
“A majority of the Court ruled in Ryan Co. v. Pan-Atlantic Corp., 350 U.S. 124, [76 S.Ct. 232,] that where a shipowner and stevedoring company entered into a service agreement, the former was entitled to indemnification for all damages it sustained as a result of the stevedoring company’s breach of its warranty of workmanlike service. And see Wey-erhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563 [79 S.Ct. 438]. The facts here are different from those in the Ryan case, in that this vessel had been chartered by its owners to Ovido Compañía Naviera S. A. Panama'; which company entered into the service agreement with this steve-doring company. The contract, however, mentioned the name of the vessel on which the work was to be done and contained an agreement on the part of the stevedoring company ‘to faithfully furnish such steve-doring services.’
'‘We think this case is governed by the principle announced in the Ryan case. The warranty which a stevedore owes when he goes aboard a vessel to perform services is plainly for the benefit of the vessel whether the vessel’s owners are parties to the contract or not. That is enough to bring the vessel into the zone of modern law that recognizes rights in third-party beneficiaries. Restatement, Law of Contracts, § 133. Moreover, as we said in the Ryan case, ‘competency and safety of stowage are inescapable elements of the service undertaken.’ 350 U. S., at 133 [76 S.Ct. at 237]. They are part of the stevedore’s ‘warranty of workmanlike service that is comparable to a manufacturer’s warranty of the soundness of its manufactured product.’ Id., [350 U.S.] at 133-134 [,76 S.Ct. at 237]. See MacPherson v. Buick Motor Co., 217 *491N.Y. 382, 111 N.E. 1050, [L.R.A. 1916F, 696.]”
See also Waterman Co. v. Dugan & McNamara, 364 U.S. 421, 81 S.Ct. 200 (1960), wherein it was held that a steve-doring company was liable to the shipowner for indemnity even though there was no privity of contract between them and regardless of whether the injured longshoreman asserted his claim in an in rem or an in personam proceeding, since the stevedore’s warranty of workmanlike service aboard the ship was for the benefit of the ship and its owner as well as the stevedore.
I am of the view that the provision of the stevedoring contract under which ap-pellee agrees to be responsible “for injury to or death of any person caused by its negligence,” which statement is simply an affirmation of an existing duty on the part of appellee, does not exclude from the stevedoring contract the implied-in-fact obligation to perform steve-doring services in a workmanlike' manner, nor do I find any other provision of the contract or the contract as a whole to have any such effect. The obligation of the stevedore to indemnify the shipowner rests not upon negligence but upon contract. The contract does not limit such obligation.
The final question is whether the implied-in-fact contractual obligation of ap-pellee to render its services in a workmanlike manner embraces within its scope the duty to see that the equipment or gear required to be and furnished for the use of its own employees in the performance of its stevedoring services and exclusively used and controlled by them, must be seaworthy and fit for the use intended. Under the contract, appellee agreed to furnish not only all necessary labor and supervision but also “all ordinary gear for the performance of the services described in this contract, including winch drivers and usual appliances used for stevedoring.” There is no contention in the record that the Seattle hatch tent and tent tie-down rope were not ordinary gear which appellee was obligated to furnish under the terms of the contract.
I have found no Supreme Court decision which has occasion to pass upon the duty of a stevedoring company vis-a-vis-the shipowner in respect to gear or equipment required to be and furnished by it in the performance of stevedoring services. I recognize that liability has been imposed upon a shipowner for breach of the implied warranty of seaworthiness in favor of a longshoreman whose injuries were caused aboard ship by defective gear or equipment belonging to and brought on the ship by his employer— the stevedoring company. Alaska Steamship Co., Inc. v. Petterson, 347 U.S. 396, 74 S.Ct. 601 (1954). The right of the shipowner to recover indemnity from the stevedoring company was not involved in that case. I have found no intimation in the many decisions of the Supreme Court which I have reviewed that a shipowner would be denied the right to indemnity against the stevedoring company in instances where liability has been imposed on the shipowner either for damages to person or property caused solely by defective equipment furnished by the stevedoring company and exclusively used, controlled, and supervised by it. To impose liability on the shipowner in favor of a longshoreman and to deny recovery over against the stevedoring company under such circumstances, is inequitable. Since the loss must be borne by either one or the other, it is not unfair that such loss be ultimately borne by the one best able to eliminate the hazard, to wit: the owner of the defective gear or equipment who supplied it and whose use and control over it was exclusive.
In my view, the Supreme Court decisions above cited do not exclude the existence of liability without fault as an element of the warranty of workmanlike service under the facts of this case.
In Ryan, supra, it is stated, 350 U.S. at pp. 133-134, 76 S.Ct. at p. 237:
“It is petitioner’s [stevedore’s] warranty of workmanlike service that is comparable to a manufac*492turer’s warranty of the soundness of its manufactured product.”
This statement was reaffirmed by the Supreme Court in Waterman, supra, and in Crumady, supra.
The only case passing upon this point to which attention has been directed is Booth Steamship Co. v. Meier & Oelhaf Co., 262 F.2d 310 (2d Cir.1958). The majority opinion states that Booth is indistinguishable in any significant way from the instant case but disagrees with the result reached in the Booth case. In Booth, a contractor undertook to overhaul the engines on Booth’s vessel. One of the first steps in the execution of the work was the extraction of tight fitting cylinder liners from the engine block, and this was undertaken by means of extracting equipment consisting essentially of a rigid bar, or strongback, which was attached to the liner, and a jack, which was used to raise the liner by raising the strongback. Because the lifting arm of the jack was relatively short, it was necessary periodically to suspend the strongback holding the liner from a wire strap while the jack itself was lifted up. It was while the strong-back was so suspended that the strap parted, allowing the strongback to fall and sever the thumb of the plaintiff, who was engaged in elevating the jack itself for further lifting.
The shipowner was held liable to the injured workman of the contractor for unseaworthiness. The shipowner sought indemnity from the contractor, but the district court dismissed the third-party claim of the shipowner since there had been no proof that the contractor had been negligent in failing to discover the defect in the strap, which defect was latent and not discoverable on visual inspection.
In the course of its opinion, the court stated, 262 F.2d at pp. 314-315:
“The implied warranty of suitability for a particular use made by manufacturers and retailers is generally considered absolute, however, and is not avoided by the fact that in the exercise of ordinary care the defendant could not discover the injury-causing defect. See 1 Williston on Sales § 237 (Rev.Ed.1948 and Supp.1958). It has repeatedly been suggested that the liabilities of suppliers should be co-extensive with those of the law of sales. See 4 Wil-liston on Contracts § 1041 (1936 Ed.); 2 Harper and James, The Law of Torts, § 28.19 (1956); Prosser on Torts 496 (2d Ed.1955). In Shamrock Towing Co. v. Fitcher Steel Corp., 2 Cir., 1946, 155 F.2d 69 we stated in dictum that the warranty of a supplier of marine equipment was as absolute as the maritime warranty of seaworthiness, see The H. A. Scandrett, 2 Cir., 1937, 87 F.2d 708; that it therefore made no difference whether a defect was discoverable ; that as a result both warranties would be breached in the event that the chattel supplied proved inadequate to the purpose for which it was supplied under normal conditions of use. We see no reason to alter that opinion.
“Like the manufacturer or retailer the supplier profits from the bailment or lease of his equipment. Although he is unable to prevent defects arising in the course of manufacture, his expert knowledge of the characteristics of the equipment in use should enable-him to detect them more readily than the user. It is therefore not less reasonable as an incident of his contract to charge him with the duty of making tests, the omission of which would not constitute negligence, than it is to charge the manufacturer or retailer with a similar responsibility. We think that this is particularly true when the chattel is supplied, as it presumably was here, in the partial fulfillment of a general undertaking to make repairs. In such circumstances the hirer defers to the special qualifications of the contractor in both the selection and use of the equipment. Relying on the sup*493plier’s control of the work and with confidence in the supplier’s expert knowledge and competence, he makes at most only a routine inspection of the equipment employed. To ,say that the supplier warrants the equipment merely confirms the customary reliance which flows from .such a relationship and which affords an appropriate remedy.
“Applying general principles to the facts of this case, we find that the •defect which caused the plaintiff’s injury was not detectable by the ordinary visual inspection which the vessel’s officers on the scene may be ■expected to make. Such latent defects in wire as are undetectable on visual inspection may result from improper manufacture or from fatigue resulting from use over a period of time. They may perhaps be discovered by subjecting the ■equipment to appropriate tests with safety factors in excess of the contemplated undertaking. Furthermore, it is the supplier and not the •shipowner who knows the actual history of prior use of the equipment. He alone is in the position to establish such retirement schedules or periodic retests as will best prevent the development of visually undetec•able flaws.
“Accordingly we hold that if the •contractor undertook to do the work of repair of the vessel’s engines, .and if he supplied the equipment which failed in the course of the use for which it was supplied, then the failure constituted a breach of the contractor’s implied warranty of workmanlike service and rendered him liable to indemnify the owner for damages paid to the contractor’s employee on account of injuries resulting directly from the failure.”
I find no significant fact which distinguishes the Booth case from the instant case. Much that is said in Booth can be applied with equal force to this ■case. I see no policy consideration in Maritime law and no injustice in requiring a stevedore to indemnify a shipowner from a liability visited upon the shipowner solely through failure on the part of the stevedore to furnish, in connection with the performance of a steve-doring contract, equipment that is fit for the use intended.
It is to be noted that the case presented to us is that of the shipowner vis-a-vis the stevedoring company. We are not concerned with the injured longshoreman who has received compensation for his injuries, nor policy considerations which have led to a tender solicitude on the part of the Admiralty Court for injured seamen and longshoremen. The contest here is between equals and no thought should be given to which of them is more able to bear the burden.
I would set aside the decree of the district court dismissing appellant’s libel and would remand the cause to the district court with instructions to enter judgment in its favor against appellee for the amount of the indemnity sought.