Court Opinion

ID: 3600913
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:47:24.415947+00
Date Added: 2024-06-11T13:59:38.453651
License: Public Domain

This action is brought to recover for an injury done by the unskillful management of a tug belonging to the defendant, which was engaged in towing a scow, on which were certain cattle belonging to the plaintiff.
The questions to be discussed here may be resolved into three. (1.) Can the plaintiff, under the facts of the case, recover in a common-law action provided that can be maintained under the provisions of the United States Constitution? (2.) Has the Supreme Court of New York jurisdiction over the case, the injury having occurred on the River St. Lawrence? (3.) Does the act of Congress, of the year 1851 (5 U.S. Stat. at Large, 635), apply to the case, and, if so, do its provisions oust the court of its jurisdiction?
(1.) The facts of the case show that the plaintiff employed one Nicholas Cavanaugh, who was the owner of a sea-worthy scow, to transport for a fixed price his cattle and horses from *Page 245 
Brockville, on the Canada side of the St. Lawrence, to Morristown, on the American shore. Other drovers had engaged Cavanaugh to do the same service for their cattle. The defendant was owner of the tug, Sarah Daly, which was then lying at the wharf in Brockville, and under the control of the defendant's agent. The captain of the tug made an agreement with Cavanaugh, in the presence of the plaintiff and another drover, to tow the scow for five dollars. The plaintiff and the other drover, to the captain's knowledge, each furnished one dollar of this amount and Cavanaugh three dollars. The tug was managed so unskillfully, after it had taken the scow in tow, that it pulled the boat under the water and caused the loss of sixteen head of cattle belonging to the plaintiff and injured others.
The case is here presented of an owner of goods intrusting them to a bailee to do work upon them, and the bailee, with the knowledge and privity of the owner employing another person to aid him in accomplishing the stipulated work, and by his unskillful conduct causing injury to the owner. Such a state of facts gives the owner a right of action. It is his property which is injured, and he is entitled to redress. True, the bailee having a special property may also have his action. A recovery, either by the bailor or the bailee, is a bar to an action by the other party. (Green v. Clarke, 12 N.Y., 343.) In that case the defendants were sub-contracting carriers, and it was contended, on their behalf, that the owner could not sue for want of privity, as he was not a party to the contract between the original carrier and the sub-contractor. The court rejected this view, holding that the question of privity was immaterial. GARDINER, J., said that if the bailee had sued and recovered he would have held the amount recovered in trust for the owner; and to insist that the bailee should sue was simply maintaining that a dry trustee should sue rather than the cestui que trust. It was, further, his view that the owner had such an interest in the sub-contract that he might, at his election, affirm it and make the sub-contractors liable on their contract as though it had been made *Page 246 
with them on his authority; and that this rule was applicable, whether the sub-contract was express or implied. (Pages 354-357.) There is little doubt, on the testimony, of the liability of the defendant to either the plaintiff or Cavanaugh as they might respectively elect to bring the action. Though not a common carrier, he was bound to exercise ordinary care (Wells v.Steam Navigation Co., 2 Comst., 204; 4 Seld., 375; Merrick v.Brainard, 38 Barb., 574), and is liable for the want of it. It must be held that the plaintiff had his right of action against the defendant to recover the damages sustained by him.
(2.) The next inquiry is whether the Supreme Court has jurisdiction over a contract of this kind. This depends upon the jurisdiction of the United States courts as conferred in the Constitution. The judicial power of the United States extends to all cases of admiralty and maritime jurisdiction. There can be but little doubt that this language includes the present case. After great discussion and much vacillation of opinion it may now be considered as law that the admiralty jurisdiction of the District Court of the United States extends, by force of the Constitution and of the judiciary act of 1789 (§ 9), to the great lakes as well as to the St. Lawrence, connecting them with the ocean. The leading case of De Lovio v. Boit (2 Gallison, 398) is now accepted law. In the case of contracts the test of jurisdiction is not necessarily whether the contract is to be performed on navigable waters, but whether the subject-matter of the contract is maritime. (Insurance Co. v. Dunham, 11 Wall. [U.S.], 1.) The carriage of passengers on navigable waters is a maritime contract. (The Moses Taylor, 4 Wall. [U.S.], 411.) The cases are extensively collated and thoroughly discussed in a learned article on admiralty jurisdiction in 5 American Law Review, 581.
The present contract was, according to these and other authorities, a maritime one, over which the United State court has jurisdiction. (Moore v. American Transportation Co., 24 How. [U.S.], 1.) This proposition, however, *Page 247 
does not, of itself, exclude State jurisdiction. The true view is that the Constitution vested jurisdiction as it existed when that instrument was adopted. Where the jurisdiction was concurrent with the State courts, it so continued; where it was exclusive in admiralty, it became exclusive in the Federal courts. It is a well known distinction in admiralty that proceedings are either (in personam) against the person or (in rem) against the property. The latter kind of jurisdiction is exclusive in the Federal courts, and any act of a State legislature purporting to confer it upon a State court is unconstitutional. (The MosesTaylor, 4 Wall. [U.S.], 411; The Hine v. Trevor, id., 555;The Belfast, 7 id., 624.)
On the other hand, jurisdiction over the person of one who has violated a maritime contract or committed a maritime tort is not exclusively vested in a court of admiralty. From time immemorial, questions of this kind have been entertained in the English common law courts. They could have been instituted in the State common law courts when the United States Constitution was formed. Proceedings of this character are expressly reserved to the State courts by section 9 of the judiciary act of 1789. (1 U.S. Statutes at Large, 76.) The reservation is still more clearly expressed in section 1 of the act of February 20, 1845, concerning the admiralty jurisdiction upon the great lakes, and the navigable waters connecting them. The words of that act are: "Saving to the parties any concurrent remedy which may be given by the State laws, where such steamer or other vessel is employed in the business of commerce or navigation." Though this language is more explicit than that of the act of 1789, yet its purport is the same. The two statutes show unmistakably the intent of Congress to reserve to suitors their remedies in State courts, except so far as to carry out the law of 1851, to be hereafter considered. It is, accordingly, in general, a matter of election with an injured party, whether he will ask relief in a State or a United States court, and the defendant cannot object to a prosecution in a State court on the ground that the cause of action is, in its nature, maritime, so long as the *Page 248 
action is in personam. The subject is put at rest by the decision in Steamboat Co v. Chase (16 Wallace [U.S.], 522), reviewing the case of Chase v. The American Steamboat Co. (9 R.I., 420). This case should be stated with some detail, so as to show the precise ground upon which the decision was placed. There is a statute in Rhode Island giving a right of action to the administrator for the benefit of the next of kin of one who is killed while crossing a public highway, by the negligence or carelessness of a common carrier. A steamer, owned by a common carrier, and plying upon Narragansett bay, a public highway on tidal waters, between Newport and Providence, Rhode Island, negligently ran over one George Cook, crossing upon the bay with reasonable care, and killed him. Chase, as administrator of Cook, brought an action in the State court, under the provisions of the statute, against the carrier. The latter set up in answer that the State court had no jurisdiction, by reason of the provisions of the United States Constitution, and of the legislation of Congress under it. The Supreme Court of the United States in disposing of this question, expressed some doubt whether the admiralty courts had, independent of the State statute, power to entertain a case where one is wrongfully killed by the act of another. It is quite well settled that a State court has no such jurisdiction. (Carey v. Berkshire Railroad Co., 1 Cushing, 475, and cases; Green v. Hudson River R.R. Co., 2 Keyes, 294.) In the admiralty courts, the question is still open. (Cutting v. Seabury, 1 Sprague, 522.) The Supreme Court, therefore, in Steamboat Co. v. Chase, discussed the question of the jurisdiction of the State court on the theory that a court of admiralty had, without reference to the State statute, jurisdiction over the cause. This view brought up distinctly the point whether the jurisdiction of a State court and an admiralty court may be concurrent in respect to a marine tort. (P. 532.) Mr. Justice CLIFFORD pronounced the opinion of the court. An extract from his opinion shows the ground of the decision. "Where the suit is (in rem) against the thing, the original jurisdiction is exclusive in the District *Page 249 
Courts, as provided in section 9 of the judiciary act; but when the suit is (in personam) against the owner, the party seeking redress may proceed by libel in the District Court, or he may, at his election, proceed in an action at law, either in the Circuit Court of the United States, if he and the defendant are citizens of different States, or in a State court, as in other cases of actions cognizable in the State and Federal courts exercising jurisdiction in common law cases, as provided in section 11 of the judiciary act. He may have an action at law in the case supposed, either in a Circuit Court or in a State court, because the common law in such a case is competent to give him a remedy, and whenever the common law in such a case is competent to give a party a remedy, the right to such a remedy is reserved and secured by the saving clause contained in section 9 of the judiciary act." (Page 533.)
This course of reasoning, though applied in the case cited to marine torts, is equally applicable to maritime contracts. The legislation of Congress, on the whole subject, shows that it was intended in personal suits to allow a party to seek redress in the Admiralty Court, if he saw fit to do so, but not to make such a course compulsory in any case where the common law is competent to give him a remedy. Tried by this test, the plaintiff, in the present case, had a right to proceed in the State court, and having made his election to do so, that court had jurisdiction. (See, also, Leon v. Galceran, 11 Wallace [U.S.], 185; 5 Am. Law Rev., 582, 583, 618.)
(3.) The next point to be considered is, the effect of the act of March 3, 1851. (5 Statutes at Large, 635.) The section bearing upon the point presented in the case at bar, is the third. Its terms are as follows: "The liability of the owner or owners of any ship or vessel, for any embezzlement, loss or destruction by the master, officers, passengers, or any other person or persons, of any property, goods or merchandise, shipped or put on board of such ship or vessel, or for any loss, damage or injury by collision, or for any act, matter or thing, loss, damage or forfeiture, done, occasioned or incurred, without *Page 250 
the privity or knowledge of such owner or owners, shall in no case exceed the amount or value of the interest of such owner or owners respectively in such ship or vessel, and her freight then pending." This section, according to its plain and apparent meaning, includes three distinct cases. (1.) Damage done to goods on board of the vessel of the owner. (2.) Damage by collision to other vessels and cargoes. (3.) Any other damage or forfeiture done or incurred without the privity or knowledge of the owner. (Norwich Company v. Wright, 13 Wallace [U.S.], 104.)
Assuming that the act of 1851 is applicable to the case at bar, it falls within the third of these classes. The negligence causing the injury, it is conceded, occurred without the privity or knowledge of the owner. The act of 1851 is founded on a great rule of public policy. It was passed in order to encourage the investment of capital in ships. The main intent of Congress was to introduce into the law of shipping the principle of "limited liability," which is such a marked element in the law of corporations, distinguishing them from the usual individual or partnership responsibility of owners. The ship-owner must act through agents who might, under the ordinary rules of law applicable to agency, subject him to unlimited liability. The statute, for his protection, allows him to put at risk a limited amount of his capital, as a stockholder in a manufacturing company may do by the general rules of law governing corporate stock. This principle, however, does not of itself affect the jurisdiction of a State court to entertain an action against a ship-owner for damages. In many cases, the injury done by the agents of the owner would not be of such a nature or extent as to bring the statute into practical operation. In cases where the loss of the injured party is much less than the value of the ship, an ordinary action for damages will naturally be resorted to. There is no reason why it should not be, unless there is something in the other sections of the act of 1851 which necessitates a different conclusion. The only other section which could affect the case is the fourth. The *Page 251 
substance of that is, that where any loss, etc., falling within the third section, is sustained by several owners of property, etc., and the whole value of the vessel and her freight is not sufficient to pay all the losses, a pro rata compensation is to be paid to the respective parties who have sustained losses. In such a case, "appropriate proceedings" may be taken in court by any of the parties interested to have a due apportionment made. The owner of the vessel and freight may, at his option, transfer his interest to a trustee for the claimants, whereupon all claims and proceedings against him shall cease, and the property transferred to the trustee will be distributed among the respective claimants on equitable principles.
There is nothing in this section to oust the State court of its jurisdiction. It does not begin to operate until there is some affirmative act by a party interested to avail himself of the benefits of the statute. The section requires "appropriate proceedings" to be instituted in a competent court before there can be any apportionment. Before the ship-owner's liability is terminated he must, as has been seen, make an assignment of his interest to a trustee, or do some equivalent act. Neither of these acts may be necessary or expedient. In that case, no reason can be given for depriving the State court of a jurisdiction which, without the statute of 1851, it would plainly have. The correctness of these general views is fully sustained by the case of Norwich Company v. Wright (13 Wall. [U.S.], 104). That case gives construction to a number of doubtful questions under the act of 1851. It points out the mode of proceeding in case an action for damages is pending in a State court against a ship-owner, where such owner seeks to avail himself of the provisions of the statute. He should file a libel in admiralty, with a payment into court of the value of the ship and freight, or make an assignment of them to a trustee. He may then plead these facts in the State court in bar of the action, or he may procure an order from the Admiralty Court restraining the further prosecution of the action. (P. 125.) There is no hint here, that the State court *Page 252 
has no jurisdiction. It is plain, that this method can only be adopted when the owner is willing to pay into court the value of the ship, or else to make the statutory assignment. Where one of these acts is not done, the action continues in the State court.
Reference should also be made to the fifty-fourth rule in Admiralty. This owes its existence to the discussions evoked byNorwich Company v. Wright (supra). (See the rule in 13 Wallace, XII.) It provides, in substance, that when any case within the act of 1851 arises, if the owner desires to claim the benefit of the limitation of liability provided for in the act, he may file a petition in the proper District Court, setting forth the facts on which the limitation is claimed, and praying proper relief. An appraisement is then made of the value of the owner's interest, and the amount is paid into court, or due security for such payment given, or, at the owner's election, an assignment of his interest is made to a trustee, according to the fourth section of the statute. The District Court of the United States then issues a monition against all persons claiming damages for the embezzlement or destruction of property, or injury to it, to appear before the court and make proof of their claim, and, on the ship-owner's application, an order is issued restraining the further prosecution of all suits against him. After this, all further proceedings will be had in the United States court, the property being applied by it to the payment of the respective claims. This rule shows, in the clearest manner, the opinion of the Supreme Court of the United States, that the act of 1851 does not of itself deprive the State court of jurisdiction. There must be specific action on the part of the ship-owner, or other persons interested in the fund, invoking the aid of the statute, and after that has been taken, and in consequence of it, further prosecution in the State court is restrained.
The act of 1851 has received construction in Knowlton v.Providence  N.Y.S.S. Co. (53 N.Y., 76), but that decision does not bear so closely upon the facts of the present case as to require special notice. *Page 253 
On the whole, the motion for a nonsuit should have been denied, and as it was an error to grant it, the judgment appealed from should be reversed.
All concur.
Judgment reversed.