290 U.S. 333 (1933), 80, May v. Hamburg-Amerikanische Packetfahrt Aktiengesellschaft

Docket Nº:No. 80
Citation:290 U.S. 333, 54 S.Ct. 162, 78 L.Ed. 348
Party Name:May v. Hamburg-Amerikanische Packetfahrt Aktiengesellschaft
Case Date:December 04, 1933
Court:United States Supreme Court

Page 333

290 U.S. 333 (1933)

54 S.Ct. 162, 78 L.Ed. 348

May

v.

Hamburg-Amerikanische Packetfahrt Aktiengesellschaft

No. 80

United States Supreme Court

Dec. 4, 1933

Argued November 14, 15, 1933

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

1. In order that a shipowner may be relieved by the Harter Act of liability for damage resulting from negligent operation or management of the ship and be entitled to general average under shippers' agreements (Jason clause) based on that statute, it is necessary that he shall have exercised due diligence to make the vessel seaworthy, not only at the beginning of the voyage, but at any intermediate stage of it (preceding the loss or damage) at which he took control. P. 342.

Page 334

So held where the purpose of taking control was to inspect the ship after an accident and to determine whether she was in condition to proceed.

2. His ship having been injured en voyage, the master put into a port of call and notified the owner, a corporation. The owner dispatched its marine superintendent to inspect the ship and determine what to do, who, after consulting with the master and others, ordered her sent on with tugs. Held that, the owner having thus intervened and taken over the management, the continuity of the voyage was interrupted, and the owner was under a renewed obligation of diligence to make the ship seaworthy then. P. 345.

3. A shipowner who would claim the exemption of § 3 of the Harter Act has the burden of proving that he exercised due diligence to make his vessel seaworthy. P. 346.

4. The ship, assumed to have been seaworthy when she left the United States, damaged her rudder stock and bent her rudder blade five degrees by an accident on her way up the Weser River, below Bremen, her first port of discharge. On arriving at that port with the aid of tugs, she was inspected by the owner through its marine superintendent, but, owing to negligence, the bend in the blade was not discovered. The whole damage could have been repaired at Bremen, but, apparently to save time and expense, the owner decided to send her on to Hamburg, her next port of discharge, 70 miles away. While proceeding down the Weser with the aid of three tugs, she was grounded by bad seamanship in an attempt to pass another vessel, and it became necessary to lighter and transship her cargo and to return her to Bremen for repairs. Held (considering evidence as to the effect on navigation of the disablement of the rudder and the bend in its blade) that the owner had failed to sustain the burden of establishing due diligence in making the ship seaworthy for the voyage down the Weser. P. 346.

5. A shipowner who has failed to comply with the condition laid down in the Harter Act (§ 3) and in shippers' agreements for general average (Jason clause) by not exercising due diligence to make his vessel seaworthy remains liable to cargo for damage caused by faulty navigation, and cannot claim contribution under the agreements, and this without regard to whether there was a causal relation between the defects of the vessel and the disaster in question. P. 350.

63 F.2d 248 reversed.

Page 335

Certiorari to review the affirmance of a decree in admiralty, 57 F.2d 265, which dismissed five consolidated libels against the respondent ship company. The libels were filed by May, as assignee of numerous consignees of cargo, who had been required by the respondent to deposit money as security for general average contributions. The object of the libels was to recover the moneys upon the ground that they were exacted without right as a condition to delivery of the goods.

Page 339

CARDOZO, J., lead opinion

MR. JUSTICE CARDOZO delivered the opinion of the Court.

The assignee of cargo owners filed libels against the respondent, the owner of the Isis, to recover moneys deposited as security for general average contributions, the deposit being exacted by the respondent as a condition of delivery.

The Isis, a vessel of about 7,000 tons, sailed from loading ports on the Pacific Coast with cargo destined for Bremen, Hamburg, and Antwerp. She was then seaworthy in hull and gear, and fitted in all respects for the intended voyage. In the Weser River not far from Bremen, Germany, her first port of discharge, she stranded by reason of negligent

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navigation, with damage to her rudder stock and also to the rudder blade. Aided by tugs, she continued up the river to Bremen, disclosing, as she moved, a tendency to sheer to starboard. On arrival at that port, she discharged her Bremen cargo, and there was then an inspection of the damage. The rudder stock had been twisted about 45 degrees. To ascertain the condition of the blade, the vessel was put in a drydock and kept there a few hours. The examiners reported that the blade was intact. In fact, the lower part of it was bent to starboard to the extent of about five degrees. The inspection was after dark, with the bottom of the rudder still under water. The two courts below have concurred in a finding that the use of reasonable care would have caused the bend to be discovered.

The head office of the owner at Hamburg was notified of the mishap to the vessel before she landed at Bremen, and the marine superintendent was sent to meet her. The superintendent, Reichenbacher, and the master of the vessel, Krueger, consulted, along with others, as to what ought to be done. Bremen had adequate facilities for the making of complete repairs, but it would have taken about two weeks to make them. To save time and expense to the vessel and her cargo, the decision was made to send her to Hamburg, about seventy miles away, the cargo still aboard. Before a start was made, the rudder was lashed amidships so as to be incapable of motion. The vessel then set forth in the towage of three tugs, one of them in front and one on either side. No harm befell for a distance of about six miles. Then, at or near the junction of the Weser and Lesum Rivers, the pilot in control changed her course to starboard in order to pass a vessel coming up. There is a finding that her navigation at this point was unskillful and negligent in that she was driven at too high a speed and too close to the edge of the channel. At all events, in passing, she made a sheer to starboard

Page 341

which the tugs and her engines were unable to control. She was stranded hard and fast amidships on a sand spit near the bank.

With the aid of tugs and lighters, the vessel and the cargo were brought back to Bremen, where the new damage was repaired. It was in the course of these repairs that the bend in the rudder was observed.1 In the meantime, the entire cargo was transshipped to Antwerp. Before delivery at destination, the respondent made demand of the consignees that they deposit sums of cash as security for the payment of general average contributions to the sacrifices and expenses due to the two strandings. The bills of lading contain what is known as the Jason clause (The Jason, 225 U.S. 32, 49) whereby the consignees agree that, if the shipowner has used due diligence to make the ship seaworthy, the cargo is to be liable in general average when the sacrifice or expense results from negligent navigation. The form of the clause applicable to nearly all the shipments is stated in the margin.2 For a small part of the shipments, the [54 S.Ct. 164] form is slightly different, but no point is made that there is any difference of meaning.

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Under these clauses, the consignees do not dispute the liability of the cargo for general average contributions in respect of the first standing. They do dispute the liability in respect of the second. To recover their deposits to the amount of that excess, they transferred their claims to an assignee by whom five libels, afterwards consolidated, were filed against the owner. The District Court, confirming the report of a Commissioner, gave judgment for the defendant. 57 F.2d 265. The Court of Appeals for the Second Circuit affirmed, 63 F.2d 248, though, in so doing, it did not agree with all the findings below. The libelant, May, joined the stipulators for costs (Indemnity Insurance Company of North America and Royal Indemnity Company) in a petition to review the decree of affirmance. A writ of certiorari brings the case here.

1. The first question to be determined is whether the cargo must contribute to the sacrifices and expenses resulting from the second stranding if there was a negligent failure by the shipowner to make the ship seaworthy when she left her dock at Bremen.

Until the enactment of the Harter Act (February 13, 1893, c. 105, § 3, 27 Stat. 445, 46 U.S.C. § 192), a shipowner was not at liberty by any contract with the shipper to rid himself of liability to the owners of the cargo for damages resulting from the negligence of the master or the crew. Liverpool & G. W. Steam Co. v. Phenix Insurance Co.,

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129 U.S. 397, 438; The Delaware, 161 U.S. 459, 471; The Jason, supra, p. 49; The Willdomino, 300 F. 5, 9. Section 3 of the Harter Act3 was the grant of a new immunity. Neither the vessel nor her owner was to be liable thereafter for damage or loss resulting from faults or errors in navigation or in management if the owner had complied with a prescribed condition. The condition was that he must have exercised due diligence to make the vessel in all respects seaworthy and properly manned, equipped, and supplied. If that condition was not fulfilled, there was liability for negligence in accordance with the ancient rule. Release from liability for negligence when effected by the act did not mean, however, that an obligation was laid upon the cargo to contribute to general average. The Irrawaddy, 171 U.S. 187. To create that obligation, there was need of an agreement. For a time, there was doubt whether such an agreement, if made, would be consistent with public policy. The doubt was...

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