United States v. Robert Steward & Sons

• Citation: 167 F.2d 308,1948 AMC 815
• Decision Date: 29 March 1948
• Docket Number: Docket 20911.,No. 196,196
• Parties: UNITED STATES et al. v. ROBERT STEWARD & SONS, LIMITED, et al.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

1948 AMC 815, 167 F.2d 308 (1948)

UNITED STATES et al. v. ROBERT STEWARD & SONS, LIMITED, et al.

No. 196, Docket 20911.

Circuit Court of Appeals, Second Circuit.

March 29, 1948.

John W. Crandall, of New York City, J. Vincent Keogh, U. S. Atty., of Brooklyn, N. Y., and Hunt, Hill & Betts, of New City (Robert M. Donohue, of New York City, of counsel), for appellants.

William G. Symmers and Dow & Symmers, all of New York City (Frederick Fish and John S. Stillman, both of New York City, of counsel), for appellee.

Before L. HAND, SWAN and FRANK, Circuit Judges.

L. HAND, Circuit Judge.

This is an appeal from a decree in the admiralty, dismissing the petition of the United States, as owner, and of the Black Diamond Steamship Corporation, as "bareboat" charterer, to limit their liability, arising out of a collision in Belgian waters, between their ship and a British steamer. The claimants excepted to the petition, whose allegations must therefore be taken as true, and the substance of which is as follows, so far as they are here material. After the collision the owners of the British ship, which was sunk, sued the charterer in an English court, and in that suit it posted a bond in the "equivalent" of $1,000,000. The cargo owners have sued both petitioners in the Eastern District of New York for the loss of cargo, and it is this suit which the petition is designed to enjoin. Other suits are also probable. By the law of Belgium, which has accepted the Brussels Convention upon the Limitation of Shipowners' Liability of 1924, the liability of a shipowner for damages, resulting from a collision, is limited to eight pounds a gross ton, plus the freight, which is arbitrarily set at ten per cent of the vessel's value at the commencement of the voyage. In the case at bar these sums together amounted to about $325,000. The value of the petitioner's vessel is $1,000,000; but they have posted a bond in only the smaller amount and the question on this appeal is whether that satisfies the statute,¹ or whether a bond for $1,000,000 is necessary.

The petitioners argue that the limit to the collective liabilities of a shipowner, imposed by Article One of the Limitation of Liability Convention, attaches to the liabilities themselves in the same sense that the division of liability in cases of collision attaches under the Collisions Convention of 1910.² The claimants reply that the Limitation of Liability Convention goes only to the remedy, as does our own statute.³ Obviously, the answer depends upon the proper interpretation of Article One of the Limitation of Liability Convention, whose language is: "The liability of the owner of a sea-going vessel is limited to an amount equal to the value of the vessel, the freight and the accessories" etc. If the petition had said in so many words that this meant that the limit attached to the right, it would be conclusive upon exceptions, since it would have been an allegation as to foreign law, which is treated as an allegation of fact; and we are not to understand the decision in The Titanic, supra⁴ as meaning that we would refuse to recognize limits imposed upon an owner's liability by other nations which they attached to the right. In the form in which the case comes up we should read the petition with as favorable an eye as is possible, and we shall therefore construe it to mean that the Belgian law did attach the limit to the right. However, in so doing we wish to guard against any inference that this is our own interpretation of the article. With this as a premise the petitioners go on to argue that...