Court Opinion

ID: 9421129
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:57:10.195459+00
Date Added: 2024-06-11T17:22:28.956549
License: Public Domain

Mr. Justice Reed,
with whom Mr. Justice Burton joins,
dissenting.
The opinion of the Court states that “the crucial questions in this case narrow down to these: (1) Is there a judicially established federal admiralty rule governing these warranties? (2) If not, should we fashion one?” *325By question (1) the Court means, as its opinion shows, a federal admiralty rule that a warranty of an insured is to be strictly enforced with the result that a breach of the warranty relieves the insurer of liability for loss although the breach was not shown to have contributed to the loss.
The Court concludes that the literal performance rule has not been established by statute or by judicial decision. It acknowledges that a maritime insurance policy is a maritime contract brought under federal jurisdiction by the Admiralty Clause of the Constitution. Insurance Co. v. Dunham, 11 Wall. 1. And so it recognizes that the power “to fashion controlling federal rules” rests in the Federal Government — in Congress and the federal courts. However, the Court determines that in the absence of congressional action it will leave the formulation of rules governing marine insurance policies to the States. It applies this conclusion to the effect of a breach, of warranty in a maritime insurance policy.
I disagree with both conclusions. Our admiralty laws, like our common law, came from England. As a matter of American judicial policy, we tend to keep our marine insurance laws in harmony with those of England. Queen Ins. Co. v. Globe Ins. Co., 263 U. S. 487, 493; Calmar Steamship Corp. v. Scott, 345 U. S. 427, 442-443. Before our Revolution, the rule of strict compliance with maritime insurance warranties had been established as the law of England.1 That rule persists. While no case of this Court has been cited or found that says specifically that the rule of strict compliance is to be applied in admiralty and maritime cases, that presupposition has been consistently adopted as the basis of reasoning from our *326earliest days.2 Other courts have been more specific.3 No case holds to the contrary.
I am inclined to think that Congress or this Court might well consider modifying the strict rule insofar as the breached warranty does not contribute to the loss. But since the Court concludes that it will not undertake the *327task,4 it is unnecessary for me to go farther than to say that in the absence of federal amelioration I would follow the established rule of holding the insured to his warranty.5
This brings me to the crucial phase of the Court’s decision which, so the Court says, “leave [s] the regulation of marine insurance where it has been — with the States.” This is the dominant issue here, and the Court’s decision strikes deep into the principle of a uniform admiralty law and will have the result of unduly burdening maritime commerce. This is the issue presented by the petition for certiorari and argued in petitioners’ brief on the merits.
One rule of law stands unquestioned. That is that all courts, state and federal, which have jurisdiction to enforce maritime or admiralty substantive rights must do so according to federal admiralty law.6 See particularly the *328excellent discussion by Judge Magruder in Doucette v. Vincent, 194 F. 2d 834, 841 et seq. The issue of an insurer’s liability upon an insured’s broken warranty is clearly a matter of substantive law.
The Court relies upon Paul v. Virginia, 8 Wall. 168; Hooper v. California, 155 U. S. 648; and Nutting v. Massachusetts, 183 U. S. 553, as holding that “States could regulate marine insurance the same as any other insurance.” Those cases only approve provisions of state law that require agents and companies to take out licenses and conform to various conditions preliminary to doing business.7 The Court also relies on congressional action and inaction, but the fact that Congress has regulated the organization, taxing and licensing of fire, casualty and marine insurance companies in the District of Columbia, and has recognized the existence of marine companies under the Merchant Marine Act of 1920, has no relevancy to whether the provisions of state law should control the effect to be given to warranties in marine insurance policies. Nor does the McCarran Act indicate that States may legislate to change fundamentally maritime insurance law.8 It was so decided in Maryland Casualty Co. v. Cushing, 347 U. S. 409, 413. The answer as to whether state or federal law governs marine insurance contracts lies in the nature of the federal admiralty jurisdiction.
The Constitution, Art. Ill, § 2, provides that “The judicial Power shall extend ... to all Cases of admiralty and maritime Jurisdiction . . . .” The First Congress enacted that the district courts “shall also have exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction . . . saving to suitors, in all cases, the right of a common law remedy, where the *329common law is competent to give it . ...”9 In this manner national control was asserted over maritime litigation. It was needed because the Republic bordered a great length of the Atlantic littoral and the navigable waters furnished the best avenue of transportation.
Although congressional authority over maritime trade was not expressly granted by the Constitution, the grant of admiralty jurisdiction together with the Necessary and Proper Clause has been found adequate to enable Congress to declare the prevailing maritime law for navigable waters throughout the Nation.10 The Commerce Clause aids where interstate commerce is affected, but has not the scope of “navigable waters.”11 Congressional *330power to rest exclusive jurisdiction in the federal courts where, as here, the constitutionally delegated judicial authority exists, is established. The Moses Taylor, 4 Wall. 411, 429. The remedy preserved by the savings clause of the Judiciary Act of 1789, “is not a remedy in the common-laws courts . . . but a common-law remedy." Id., at 431. The meaning of the quoted clause becomes plainer when read with the state statute which The Moses Taylor held unconstitutional. That statute authorized a “proceeding against the vessel," a strictly in rem proceeding in admiralty, id., at 412, 413, different from the common-law action in personam. Consequently, when a California resident brought an in rem proceeding in a California court, he was pursuing an admiralty remedy, not a common-law remedy. This Court, therefore, held the case outside the savings clause of the ninth section of the Judiciary Act of 1789.12
On the other hand,, a state court was held to have jurisdiction to sell a vessel to enforce a lien in Knapp, Stout & Co. v. McCaffrey, 177 U. S. 638, where the suit was against the owner, in personam, although in equity for foreclosure of a possessory lien. “[T]he remedy chosen by the plaintiff was the detention of the raft for his towage charges.” Id., at 644. As this was a state-approved remedy in the common law, the use of state equity procedure to enforce the lien was held to be in accord with the reservation of a common-law remedy from the exclusive jurisdiction of admiralty.13 Thus, by *331saving a suitor’s common-law remedy, Congress has created by § 9 of the Judiciary Act of 1789, now 28 U. S. C. (Supp. V, 1952) § 1333, only a limited exclusive jurisdiction. The state courts may furnish not only a common-law remedy existing at the time of the adoption of the Constitution, for substantive admiralty rights, but also new judicial remedies created by statute; that is, whatever remedy is not strictly in rem.14
*332State authority, however, although it may provide remedies, does not extend to changing the general substantive admiralty law. That is the maritime law existing as a body of law enforceable in admiralty. The extent of the States’ power to grant rights arising from maritime incidents is not subject to definition. It may vary as the course or manner of navigation or commerce changes. It exists in some circumstances, see Just v. Chambers, 312 U. S. 383, 388, and, as indicated both in the majority and minority opinions in the Jensen case, 244 U. S. 205, must be determined in each situation.15 The principles which control the validity of an assertion of state power in the admiralty sphere are, however, clear. State power may be exercised where it is complementary to the general admiralty law. It may not be exercised where it would have the effect of harming any necessary or desirable uniformity.16 The cases decided by this Court make it plain that state legislation will not be permitted to burden maritime commerce with variable rules of law that destroy that uniformity.17
*333Since Congress has power to make federal jurisdiction and legislation exclusive, the situation in admiralty is somewhat analogous to that governing state action interfering with interstate commerce. In the absence of congressional direction, it is this Court that must bear the heavy responsibility of saying when a state statute has burdened the required federal uniformity.18 It is one thing to allow the States to add a remedy or create a new cause of action for certain incidents arising out of maritime activity. It is quite another thing to relinquish an entire body of substantive law making for a whole phase of maritime activity to the States. Such action does violence to the premise upon which the admiralty jurisdiction was constructed.19
It is not only in markings, lights, signals, and navigation that States are barred from legislation interfering with maritime operation. The need for a uniform rule is just as great when dealing with the effect to be given to marine insurance on boats which plough our navigable waters. A vessel moves from State to State along our coasts or rivers. State lines may run with the channel or across it. Under maritime custom an insurance policy usually covers the vessel wherever it may go. If uniformity is needed anywhere, it is needed in marine insurance. It is like the question of seaworthiness which must be controlled by one law. It presents the same problem as a state law controlling the operation of interstate boats. Kelly v. Washington, 302 U. S. 1, 15. For a State to require policies to be issued under its authority or to require extra-state policies to be interpreted by its laws *334burdens maritime operations unduly. Shipmasters must know how to handle their vessels to preserve their insurance. Insurers must know the risks they are assuming when they fix their premiums. What law is to govern— that of the State where the insurance contract was issued, the State of the accident, or the State of the forum? It seems an unreasonable interference with maritime activity to allow the many States to declare the substantive law of marine insurance.
The Court refuses to declare the governing maritime law on warranties in this case because it could only be done “piecemeal, on a case-by-case basis.” It would prefer to await congressional enactment of a comprehensive code. But questions of contract interpretation and the effect to be given to contract provisions are questions which the Court is particularly equipped to handle. A broad legislative approach might be desirable; but in its absence we could establish a rule governing the effect to be given to breaches of warranties which would be binding on every court in the land. It is certainly not desirable to defer to the legislature of Texas or any other State which, though it can enact a comprehensive code, can make it binding only in its own State. To do so destroys the essential uniformity of the maritime law.
My understanding of the facts and legal issues and the rule to be deduced from the Court’s decision forbids my joining the limited concurrence of Mr. Justice Frankfurter. The policy here is not restricted to the boat’s use on Lake Texoma nor to its use in any one State. In addition to its use on the lake, the policy covered a “cruise from Greenville, Mississippi via Mississippi and Red Rivers to Denison, Texas” and then to the lake. The waters of five States were navigated before reaching the lake, which is itself an interstate body of water lying between Texas and Oklahoma. The considerations which lead me to favor a uniform rule are not changed simply *335because a relatively small boat was here involved, or the number of States through which it passed were few, or because its ultimate destination was a small lake.
This state rule of law covering the incidents of marine insurance affects not only Texas or Lake Texoma but the longest voyage within the cruising capacity of The Wanderer. As is shown by The Hamilton, 207 U. S. 398, such an exercise of state power permits the States to declare the applicable laws of marine insurance even on the high seas. The event of loss must always be local, but the coverage of the policy is general.20 When state power intrudes upon the uniformity imposed by federal law, its ■exercise is invalid when applied to maritime litigation whether the application occurs in litigation arising from an incident that happens on a small lake or a mighty river.
I would affirm.

 Bean v. Stupart, 1 Doug. 11; De Hahn v. Hartley, 1 T. R. 343 (each reported 99 Eng. Rep., full reprint, 9 and 1130, respectively); 2 Arnould, Marine Insurance (14th ed.), c. 20.

 Hodgson v. The Marine Ins. Co. of Alexandria, 5 Cranch 100,109:
“The insurance in this ease being general, as well for the parties named as ‘for all and every other person or persons to whom the vessel did or might appertain,’ and containing no warranty of neutrality, belligerent as well as American property was covered by it.”
Livingston v. The Maryland Ins. Co., 6 Cranch 274, 278:
“The warranty, in this case, is in these words; ‘warranted, by the assured, to be American property, proof of which to be required in the United States only.’
“The interest insured is admitted to be American property, in the strictest sense of the term; but it is contended, that Baruro, a Spanish subject, had an interest in the cargo, which falsifies the warranty.
“Whether Baruro could be considered as having an interest in the cargo, or not, is a question of some intricacy, which the court has not decided; and which, if determined in the one way or the other, would not affect the warranty; because, the assured are not understood to warrant that the whole cargo is neutral, but that the interest insured is neutral.”
Hazard’s Administrator v. New Eng. Mar. Ins. Co., 8 Pet. 557, 570; Calmar Steamship Corp. v. Scott, 345 U. S. 427, 432-436.

 Ogden v. Ash, 1 Dall. 174 (Common Pleas of Philadelphia County); Martin v. Delaware Ins. Co., 16 Fed. Cas. No. 9, 161, p. 894 (C. C. D. Pa.); Snyder v. Home Ins. Co., 133 F. 848 (D. C. S. D. N. Y.); Whealton Packing Co. v. Aetna Ins. Co., 185 F. 108 (C. A. 4th Cir.); Canton Ins. Office, Ltd. v. Independent Transp. Co., 217 F. 213 (C. A. 9th Cir.); Shamrock Towing Co. v. American Ins. Co., 9 F. 2d 57, 60 (C. A. 2d Cir.); Aetna Ins. Co. v. Houston Oil & Transp. Co., 49 F. 2d 121 (C. A. 5th Cir.); Robinson v. Home Ins. Co., 73 F. 2d 3 (C. A. 5th Cir.); Levine v. Aetna Ins. Co., 139 F. 2d 217 (C. A. 2d Cir.); Home Ins. Co. v. Ciconett, 179 F. 2d 892 (C. A. 6th Cir.); Red Top Brewing Co. v. Mazzotti, 202 F. 2d 481 (C. A. 2d Cir.); United States Gypsum Co. v. Insurance Co., 19 F. Supp. 767 (D. C. S.D. N.Y.).

 Compare Halcyon Lines v. Haenn Ship Corp., 342 U. S. 282, 285.

 The facts in this case are that the boat was destroyed by fire of unknown origin while moored in Lake Texoma. “The policy provides that the insurance shall be void in case the interest insured shall be sold, assigned, transferred, or pledged without the previous consent in writing of the assurers, and further that it is warranted by the assured that the vessel shall be used solely for private pleasure purposes and shall not be hired or chartered unless permission is granted by indorsement on the policy.” 201 F. 2d, at 834. All these warranties were breached. The insurer might reasonably have required their inclusion before issuing the policy.

 Watts v. Camors, 115 U. S. 353; Garrett v. Moore-McCormack Co., 317 U. S. 239, 243. “Even if Hawn were seeking to enforce a state created remedy for this right, federal maritime law would be controlling. While states may sometimes supplement federal maritime policies, a state may not deprive a person of any substantial admiralty rights as defined in controlling acts of Congress or by interpretative decisions of this Court. These principles have been frequently declared and we adhere to them.” Pope & Talbot, Inc. v. Hawn, 346 U. S. 406, 409-410; Madruga v. Superior Court, 346 U. S. 556, 561; Maryland Casualty Co. v. Cushing, 347 U. S. 409, 413-419, and cone. 423 et seq. Cf. The Armar, [1954] 2 Lloyd’s Rep. 95, 101 (N. Y. Sup. Ct.). See 1 Benedict, Admiralty (6th ed.), p. 55, n. 77.

 In Durkee v. India Mutual Ins. Co., 159 Mass. 514, 34 N. E. 1133, the issue of the power of a State to change the admiralty law was not touched upon.

 59 Stat. 33,15 U. S. C. §§ 1011, 1012.

 Judiciary Act of 1789, § 9, 1 Stat. 77. There has been no intentional change in meaning by the revision of 1948, 28 U. S. C. (Supp. V, 1952) § 1333, which reads:
“(1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.”
The Reviser’s Note states:
“The 'saving to suitors’ clause in sections 41 (3) and 371 (3) of title 28, U. S. C., 1940 ed., was changed by substituting the words ‘any other remedy to which he is otherwise entitled’ for the words ‘the right of a common-law remedy where the common law is competent to give it.’ The substituted language is simpler and more expressive of the original intent of Congress and is in conformity with Rule 2 of the Federal Rules of Civil Procedure abolishing the distinction between law and equity.”

 The Propeller Genesee Chief v. Fitzhugh, 12 How. 443; this includes power to change the admiralty procedure to trial by jury, id., at 459-460; In re Garnett, 141 U. S. 1, 12; Southern Pacific Co. v. Jensen, 244 U. S. 205, 215; Panama R. Co. v. Johnson, 264 U. S. 375, 385; Nogueira v. N. Y., N. H. & H. R. Co., 281 U. S. 128, 138; Garrett v. Moore-McCormack Co., 317 U. S. 239, 244; O’Donnell v. Great Lakes Dredge Co., 318 U. S. 36, 39; Pennsylvania R. Co. v. O’Rourke, 344 U. S. 334, 337.
Compare The City of Norwalk, 55 F. 98, 105.

 The Belfast, 7 Wall. 624, 640. Cf. O’Donnell v. Great Lakes Dredge Co., n. 10, supra.

 The same rule was applied in efforts to enforce state-created liens in state courts by proceedings in rem against the boat in The Robert W. Parsons, 191 U. S. 17, 37, and in The Glide, 167 TJ. S. 606, 616-618, 623-624.

 Mr. Justice Brown wrote for the Court:
“The true distinction between such proceedings as are and such as are not invasions of the exclusive admiralty jurisdiction is this: If the cause of action be one cognizable in admiralty, and the suit be *331in rem against the thing itself, though a monition be also issued to the owner, the proceeding is essentially one in admiralty. If, upon the other hand, the cause of action be not one of which a court of admiralty has jurisdiction, or if the suit be in personam against an individual defendant, with an auxiliary attachment against a particular thing, or against the property of the defendant in general, it is essentially a proceeding according to the course of the common law, and within the saving clause of the statute ... of a common law remedy. The suit in this case being one in equity to enforce a common law remedy, the state courts were correct in assuming jurisdiction.” 177 U. S., at 648.
See also Rounds v. Cloverport Foundry & Machine Co., 237 U. S. 303, 308; C. J. Hendry Co. v. Moore, 318 U. S. 133, 137; The Moses Taylor, 4 Wall. 411,427.

 Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109, 123-124: “The ‘right of a common law remedy’, so saved to suitors, does not, as has been held in cases which presently will be mentioned, include attempted changes by the States in the substantive admiralty law [i. e., at p. 124, where it was said of state statutes held unconstitutional, they were “invalid, because their provisions were held to modify or displace essential features of the substantive maritime law”], but it does include all means other than proceedings in admiralty which may be employed to enforce the right or to redress the injury involved. It includes remedies in pais, as well as proceedings in court; judicial remedies conferred by statute, as well as those existing at the common law; remedies in equity, as well as those enforceable in a court of law. Knapp, Stout & Co. v. McCaffrey, 177 U. S. 638, 644 et seq.; Rounds v. Cloverport Foundry & Machine Co., 237 U. S. 303. A State may not provide a remedy in rem for any cause of action within the admiralty jurisdiction. The Hine v. Trevor, 4 Wall. 555; The Glide, 167 U. S. 606. But otherwise, the State, having concurrent jurisdiction, is free to adopt such remedies, *332and to attach to them such incidents, as it sees fit. New York, therefore, had the power to confer upon its courts the authority to compel parties within its jurisdiction to specifically perform an agreement for arbitration, which is valid by the general maritime law, as well as by the law of the State, which is contained in a contract made in New York and which, by its terms, is to be performed there/’
See Steamboat Company v. Chase, 16 Wall. 522, 530 et seq.; Panama R. Co. v. Vasquez, 271 U. S. 557, 560-561,

 Cf. Cooley v. Board of Wardens, 12 How. 299, 316; Standard Dredging Corp. v. Murphy, 319 U. S. 306, 309; Caldarola v. Eckert, 332 U. S. 155, 158. See Pope & Talbot, Inc. v. Hawn, 346 U. S. 406, 410, 418.

 Levinson v. Deupree, 345 U. S. 648.

 Kelly v. Washington, 302 U. S. 1, 15; Panama R. Co. v. Johnson, 264 U. S. 375, 386-387, and cases cited; Western Fuel Co. v. Garcia, 257 U. S. 233, 242; Chelentis v. Luckenbach S. S. Co., 247 U. S. 372, 381 et seq., and cases cited; The City of Norwalk, 55 F. 98, 106. See Madruga v. Superior Court, 346 U. S. 556, 561. 1 Benedict, Admiralty (6th ed.), p. 53. Cf. Minnesota Rate Cases, 230 U. S. 352, 399.

 Just v. Chambers, 312 U. S. 383, 388, 392; Kelly v. Washington, supra, at 14-15. Cf. Southern Pacific Co. v. Arizona, 325 U. S. 761, 769. See the statement from the international standpoint in The Lottawanna, 21 Wall. 558, 572.

 Canfield, The Uniformity of the Maritime Law, 24 Mich. L. Rev. 544, 556; Stevens, Erie R. R. v. Tompkins and the Uniform General Maritime Law, 64 Harv. L. Rev. 246, 269.

 See The City of Norwalk, 55 F. 98, 106.