Court Opinion

ID: 9299286
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:05:52.458878+00
Date Added: 2024-06-11T17:13:37.263067
License: Public Domain

SAWYER, Circuit Judge
(after stating the facts). Upon the facts as stated there can be no doubt, since the decision in the Daniel Ball, 10 Wall. [77 U. S.] 565, that the steamer Ventura was engaged in both inter-state and foreign commerce; and, as an instrument of such commerce, was subject to the regulating power of congress, notwithstanding the fact that the particular goods in question were passing only from port to port within the state of California, and constituted a portion of its domestic commerce. In the case cited the supreme court, in relation to the vessel then in question, says:
“So far as she was employed in transporting goods destined for other states, or goods brought from without the limits of Michigan, and destined to places within that state, she was engaged in commerce between the states; and however limited that commerce may have been, she was, so far as it went, subject to the legislation of congress. _ She was employed as an instrument of that commerce; for whenever a commodity has begun to move, as an article of trade, from one state to another, commerce in that commodity between the states has commenced. The fact that several different and independent agencies are employed in transporting the commodity — some acting entirely in one state, and some acting through two or more states — does in no respect affect the character of the transaction. To the extent in which each agency acts in that transportation it is subject to the regulation of congress.”
The vessel, then, was an instrument of inter-state and foreign commerce, and as such was within the regulating power of congress. But does this power extend to a limitation of the liability of the owner as to those goods shipped upon her from one port to another, in the same state, and constituting a part of the domestic commerce of such state? This seems to be a new question, as I find no case in which it has been decided, or even discussed.
In order to provide better security for the lives of passengers, and the safety of merchandise shipped, congress in 1838 [5 Stat. 304], passed an act requiring all vessels propelled, in whole or in part, by steam, to be inspected, and forbidding their employment in commerce without first being licensed upon such inspection, and without complying with many prescribed conditions as to the manning and equipment of the vessel. It provided that a sufficient number of skillful engineers should be employed; also, for safety-valves, the number and character of boats to be carried, iron tiller-rods. hose, signal-lights, etc. In 1S52 [10 Stat. 01], an amendatory act was passed, adding many other conditions, such as providing for pumps, safety-plugs, life-preservers, means of access to decks; limiting the amount of steam to be used, and the number of passengers to be' carried; excluding carriage of dangerous goods; requiring license of engineers, masters, pilots; prescribing kind and quality of boiler-iron to be used, etc. These and many other onerous conditions are imposed upon owners — some as conditions precedent to the use of the vessel at all, and the observance of the others enforced by forfeitures, fines, liabilities and severe penalties, civil and criminal. All these precautions are taken for the safety and better security of life and property embarked in commerce. As a counterpoise, in some degree. to these severe and onerous conditions, and as an encouragement to citizens to build ships and engage in commerce, some limitations, also, were subsequently placed on the common-law liabilities of ship-owners, by the provisions of the statute in question, first adopted in 1S31, and which, with the other provisions cited, have been carried into the present Revised Statutes. One means of security is to a certain extent substituted for the other, and it cannot reasonably be doubted, I think, that, upon the whole, the security afforded by the provisions of the statute, if properly enforced, notwithstanding the limitation of the personal liability of owners provided for, is far greater than it would be under the full common-law liability of owners without the security provided by congress. However this may be, a vessel engaged in inter-state or foreign commerce, as an instrument of such commerce, is brought within the regulating power of congress; and congress has seen fit to make these provisions, together with the changes in the responsibilities and liabilities of the owners of such vessels. Congress deals with the vessel as an instrument of commerce, and the rights and obligations of the owners as related to such instrument. The vessel, being engaged in inter-state or foreign commerce, must conform to the regulations prescribed; and any party using it for the purposes of domestic commerce, enjoys all the benefits afforded by these regulations, for they inhere in the vessel and cannot be separated from it. If a party avails himself of these benefits by the use of the vessel, he must also suffer the inconveniences inci*887dent to such use. He must take the vessel as he finds it, with all the inconveniences imposed, as well as the additional security afforded. It would be impracticable for two sovereignties to regulate the same instrument, used at the same time in different branches of commerce. If the state should attempt to regulate the vessel as to state commerce, and the national government as to inter-state or foreign commerce, it is easy to see that their regulations might be wholly inconsistent. The regulation as to all must necessarily fall to that sovereignty which is supreme or paramount as to any part, and having control of the instrument employed; and all parties availing themselves of the use of the instrument must take it as they find it, with all the responsibilities and exemptions provided by the controlling power. The power to prescribe the conditions upon which the vessel shall be employed as an instrument of inter-state or foreign commerce, necessarily carries with it the power to modify the rights of those who use it — as well those -who, at the same time, make use of it for the purposes of domestic commerce as those who employ it in interstate or foreign commerce. The steamer Ventura, being engaged in inter-state and foreign, as well as domestic commerce, the provisions of section 42S3 of the Revised Statutes, limiting the liabilities of owners of vessels, are applicable to her; and the limitations apply to the goods in question as well as to goods destined to ports or places beyond the state of California.
The next question is, what is meant by a loss “occasioned or incurred without the privity or knowledge of such owner?” These words, as related to this subject, seem to have been first used in the statute of Geo. 11., in 1734, where there was a restriction provided as to the liability of the owner in certain specified cases happening without the “knowledge or privity” of such owner, ling. Adm. St. 107. The restriction was extended to other cases by statute 26 Geo. 111., 1780 (Eng. Adm. St. 44S). The restriction was again extended to other cases by the statute of 53 Geo. III., 1813. And in the statutes of 18 & 19 Viet., the words “privity or knowledge” were changed to “actual fault or privity.” Macl. Shipp. 704. These statutes seem to form the basis of our own; ■ and an examination of these statutes, with their preambles, will afford no little aid in arriving at a proper construction. The policy of the act is well stated in Norwich Co. v. Wright, 13 Wall. [80 U. S.] 121, and Moore v. American Transp. Co., 24 How. [65 U. S.] 39. It is quite apparent that it was intended to exonerate owners from liability beyond the value of the ship and freight pending, for losses resulting from many causes for which they were before liable; and. among them, from mere negligence or carelessness of the master or crew of the vessel — from mere general negligence of employees. So much is already determined by the. supreme court in Walker v. Western Transp. Co., 3 Wall. [70 U. S.] 153, wherein the court says: “We are, therefore, of opinion that in reference to fires occurring on that class of vessels to which the statute applies, the owner is not liable for the misconduct of the officers and mariners of the vessel in which he does not participate personally.” Privies, as defined by Bouvier, are “persons who are partakers, or have an interest in any action or thing, or any relation to another.” One of Webster’s definitions of privity is: “Private knowledge; joint knowledge with another of a private concern; cognizance implying consent or' concurrence.” And one definition of privy, as an adjective, is: “Admitted to the participation of knowledge with another of a secret transaction; secretly cognizant; privately knowing.”' As a noun, “A partaker,” etc. As used in the statute, the meaning of the words “privity or knowledge,” evidently, is a personal participation of the owner in some fault, or act of negligence, causing or-contributing to the loss, or some personal knowledge or means of knowledge, of which he is bound to avail himself of a contemplated loss, or of a condition of things likely to produce or contribute to the loss, without adopting appropriate means to prevent it. There must be some personal concurrence, or some fault or negligence on the part of the owner himself, or in which he personally participates, to constitute such privity, within the meaning of the act, as will exclude him from the benefit of its provisions. 113 Mass. 499. It is the duty of the owner, however, to provide the vessel with a competent master and a competent crew; and to see that the ship, when she sails, is in all respects seaworthy. He is bound to exercise the utmost care in these particulars— such care as the most prudent and careful men exercise in their own matters under similar circumstances; and if, by reason of any fault or neglect in these particulars, a loss occurs, it is with his privity within the meaning of the act. But the owner, under this act, is not an insurei-. If he exercises due care in the selection of the master and crew, and a loss afterward occurs from their negligence, without any knowledge or other act or concurrence on his part, he is exonerated by the statute from any liability, beyond the value of his interest in the ship and the freight pending. So, also, if the owner has exercised all proper care in making his ship seaworthy, and yet some secret defect exists, which could not be discovered by the exercise of such due care, and the loss occurs in consequence thereof, without any further knowledge or participation on his part, he is in like manner exonerated, for it cannot be with his “privity or knowledge,” within the meaning of the act, or in any just sense, and the provision is that “The liability of the owner * * * for any *888act, matter, or thing, loss, etc., * * * occasioned without the privity or knowledge of such owner or owners, shall, in no ease, exceed the amount or value of the interest of such owner in such vessel and her freight then pending.” This language is broad, and takes away the quality of warranty implied by the common law against all losses except by the act of God and the public enemy.
When the owner is a corporation, the privity or knowledge of the managing officers of the corporation must be regarded as the privity and knowledge of the corporation itself. 113 Mass. 500; [Phila. Wilmington & Balt R. Co. v. Quigley] 21 How. [62 U. S.] 202. Where a vessel is properly officered, manned and equipped, so as to render her seaworthy when she leaves port, any loss resulting from causes arising during xhe voyage after she leaves port, without the privity or knowledge of the owner, will be within the protection of the statute. To render a vessel seaworthy, she must be furnished with compasses suitable for the voyage. Where there are several correct compasses, and one compass from any cause deviates, if a competent master, by the exercise of ordinary care and skill, can discover the deviation and correct the deviating compass by comparison with the others, and be thus enabled to steer the proper course, the ship, in this respect, is seaworthy. All compasses appear to be liable to deviate more or less, and it is in part to enable masters to make this correction that prudent owners provide the vessels with several.
[Yerdict rendered for the defendant.] 2

 [Prom 5 Cent. Law J. 325.]