Bisso v. Inland Waterways Corp.

• Decision Date: 01 September 1953
• Docket Number: No. 910.,910.
• Citation: 114 F. Supp. 713
• Parties: BISSO v. INLAND WATERWAYS CORP.
• Court: U.S. District Court — Eastern District of Louisiana

114 F. Supp. 713

BISSO v. INLAND WATERWAYS CORP.

No. 910.

United States District Court E. D. Louisiana, New Orleans Division.

September 1, 1953.

Deutsch, Kerrigan & Stiles, Francis Emmett, Rene H. Himel, Jr., Phelps, Dunbar, Marks and Claverie, New Orleans, La., proctors for libelant.

John N. McKay, U. S. Atty., Francis A. Ledet, Asst. U. S. Atty., New Orleans, La., proctors for respondent.

WRIGHT, District Judge.

This case graphically portrays the quandary in which the Marine Industry, as it relates to towing contracts, finds itself because of two decisions of the Supreme Court. In the first of these decisions, The Wash Gray (Compania de Navegacion Interior, S. A., v. Fireman's Final Insurance Company),¹ the court held, in interpreting a towage contract, that the provision "all risk to be borne by the tow" did not release the tug from liability for damage caused by its negligence, whereas in Sun Oil Company v. Dalzell Towing Company,² the court held valid and enforcible the so-called pilotage clause of a towage contract providing that the tug and her owner will not be liable for any damage resulting from orders given by the tug captain to the assisting tugs while the tug captain is aboard the assisted vessel.

Respondent here, in an effort to protect itself under this state of the law, used in its towage contract the general release from liability provision³ as found in The Wash Gray and a clause⁴ similar to the pilotage clause in Sun Oil Company v. Dalzell Towing Company. It urges either or both of these provisions, as well as other release language in the contract⁵, as a defense to the action by the libelant charging damage to its barge as a result of the negligence of the respondent's tug.

The litigious history of the release from liability clause in towing contracts properly begins in 1872 with The Steamer Syracuse⁶ in which the Supreme Court announced the principle that where a towage contract recites that the towage is to be performed "at the risk of the master and owner" of the tow, the tug is not exempt from liability for its own negligence. Following the Syracuse there arose a conflict between the Court of Appeals for the Second Circuit⁷ and the Court of Appeals for the Ninth Circuit⁸ in respect to the enforcibility of the release from liability clause where negligence on the part of the tug is shown, the Second Circuit, finding that the Supreme Court in The Syracuse had not squarely decided the point, held that where a towage contract provided that the towage would be at the risk of the towed vessel, such contract exempted the tug from liability even for its own negligence. The Ninth Circuit, on the other hand, assuming The Syracuse to be a square holding on the effect of a release from liability clause, held that the clause did not relieve the tug from liability for its own negligence. This conflict apparently was resolved in favor of the Ninth Circuit by the Supreme Court in The Wash Gray wherein it was held that a contract which provided that all risk would be borne by the towed vessel did not relieve the tug from liability for its own negligence.

Four years later, however, in Sun Oil Company v. Dalzell Towing Company, the Supreme Court held valid and enforcible, against a charge of negligence, the so-called pilotage clause of a towage contract in which it was provided that the employees of the tug became the employees of the tow when aboard the tow directing the nagivation of the tug. In so deciding the Supreme Court said⁹ that the validity of the clause could not be reasonably doubted, that no rule of public policy makes invalid a release clause even as to negligence, and that the highest public policy is found in the enforcement of the contract as it was written.

Since these two decisions, the position of the Supreme Court with respect to release clauses has been a matter of much speculation by the lower courts and by law writers. Unfortunately, in The Wash Gray the court did not disclose its reasons, other than citing The Syracuse, for holding the release clause unenforcible as against the tug's own negligence, and in Sun Oil Company v. Dalzell Towing Company, while the principles underlying the court's conclusion were clearly stated, the clause in question was materially different from the general release from liability clause.

These cases can be reconciled only by assuming that the Supreme Court in The Wash Gray refused to enforce the release clause against a charge of negligence on the part of the tug, not because it was against public policy so to do, but because it felt that the language of the release clause there in suit was not sufficiently unequivocal to release the tug from liability for its own negligence, it appearing that in neither The Syracuse nor The Wash Gray did the clause in question specifically say that the tug was released from liability for its own negligence. This conclusion is supported by the fact that the Supreme Court has held that a tug is not a common carrier and owes its tow only the duty of ordinary care¹⁰ and, consequently, the doctrine that common carriers and others under like duty cannot by any form of agreement secure exemption from liability for loss or damage caused by their own negligence is not applicable to the contract of towage.¹¹ Therefore, since the contract of towage is not so affected with a public interest as to make a release from liability clause against public policy and since the highest public policy is found in the enforcement of a contract as it is written, there would seem to be no reason why such clause should not be valid and enforcible even as to the negligence of the tug, provided the agreement of the parties on this point is clear and unequivocal.

Applying the above principles to the case at bar, it is clear that the general release clause in the contract in suit is unenforcible under The Wash Gray, the tug's exemption from liability for negligence not being sufficiently spelled out. The so-called pilotage clause, however, presents a greater problem. The pilotage clause here differs from the pilotage clause in Sun Oil Company v. Dalzell Towing Company in that it is provided that the employees of the tug are employees of the tow irrespective of whether they are aboard the assisted vessel. The difference in the clause indicates the difference in the type of service performed. In Sun Oil Company v. Dalzell Towing Company the tower was required under his contract to move a sea-going vessel of considerable size through a crowded harbor to a dock. That service is customarily performed by the tug captain boarding the assisted vessel and directing her navigation as well as the navigation of the tug or tugs. Here the service required under the contract was simply towing a dumb barge from one port to another. While the difference in the service to be performed under the Sun Oil contract and the contract here is obvious, the facts of the two cases are not so different that a different result should be reached as to the validity and enforcibility of the clause in question. The general principles announced by the Supreme Court in Sun Oil Company v. Dalzell Towing Company are certainly broad enough to cover the pilotage clause here and since the language of that clause together with the other release language in the contract clearly evidences the obvious and unmistakable intent of the parties that respondent be relieved from liability for its own negligence, the claim of libelant herein must fail.

Decree pursuant to the findings of fact and conclusions of law this day found.

Findings of Fact

1. On September 15, 1941, New Orleans Coal and Bisso Towboat Company chartered its steel bank barg Bisso No. 9 to National Oil Transport Corporation for a period of two years, from December 1, 1941, to December 1, 1943. The charter which was thereafter extended to November 15, 1944, provided:

"Lessor consents that Lessee may contract to have the barge towed pursuant to a towing contract in substantially the form of the towing contract employed by Federal Barge Lines (Form A194-Rev.) which form of contract contains the following clause:

"`The movement contemplated will be done at the sole risk of the "craft to be towed" and its cargo and neither the boats and/or other equipment used in such service nor the owner, charterer or hirer thereof, shall be liable for any loss or damage to the "craft to be towed" or its cargo, nor for any damage done by the "craft to be towed" however occurring; provided, however, the tug to which this barge may be allocated shall be approved by the Hull Underwriters on the barge.'"

2. On December 1, 1943, National entered into a blanket contract of towage with Federal Barge Lines, whereby Federal agreed to tow a number of National's barges, including The Bisso No. 9, on the Mississippi River. This contract provided:

"(4) The movement contemplated will be done at the sole risk of the `craft to be towed' and its cargo, and neither the boats and/or any other equipment used in said service nor the owner, charterer or hirer thereof shall be liable for any loss or damage to the `craft to be towed' or its cargo nor for any damage done by the `craft to be towed', however occurring.

"The masters and crews and employees of all boats and/or other equipment assisting the `craft to be towed' shall, in the performance of said service, become and be the servants of the `craft to be towed', regardless of whether the `craft to be towed' assists in the service in any way and irrespective of whether they be aboard the `craft to be towed' or in command thereof."

3. In early May, 1944, respondent's towboat Cairo took in tow, eight loaded barges belonging to various persons, and proceeded up the Mississippi River from New Orleans. Libelant's steel tank barge Bisso No. 9 was one of these barges, and was bound for Cairo, Illinois, with a cargo of gasoline.

4. The Cairo's tow was split up at or near Vicksburg, Mississippi, and moved...