Island Creek Fuel & Transp. Co. v. Kenova Terminal Co.

• Decision Date: 18 April 1957
• Docket Number: No. 867.,867.
• Citation: 150 F. Supp. 479,1957 AMC 1330
• Court: U.S. District Court — Southern District of West Virginia
• Parties: ISLAND CREEK FUEL and TRANSPORTATION COMPANY, DELAWARE, a corporation, Libellant, v. KENOVA TERMINAL COMPANY, a corporation, Respondent.

150 F. Supp. 479

1957 AMC 1330

ISLAND CREEK FUEL and TRANSPORTATION COMPANY, DELAWARE, a corporation, Libellant, v. KENOVA TERMINAL COMPANY, a corporation, Respondent.

No. 867.

United States District Court S. D. West Virginia, Huntington Division.

April 18, 1957.

Selden S. McNeer, Huntington, W. Va., for libellant.

Edward B. Hayes, Chicago, Ill., Jackson N. Huddleston, Huntington, W. Va., for respondent.

HARRY E. WATKINS, District Judge.

Exceptor-libellant Island Creek relies upon the case of Bisso v. Inland Waterways Corporation, 349 U.S. 85, 75 S.Ct. 629, 99 L.Ed. 911, 1955 A.M.C. 899, which along with two other cases decided the same day (May 16, 1955), Boston Metals Co. v. The Winding Gulf, 349 U.S. 122, 75 S.Ct. 649, 99 L.Ed. 933, 1955 A.M.C. 927, and United States v. Nielson, 349 U.S. 129, 75 S.Ct. 654, 99 L. Ed. 939, 1955 A.M.C. 935, held that clauses in contracts exculpating a towboat owner for its negligence in towing craft are contrary to public policy and invalid.

Respondent relies upon the well-established rule that where considerations of public policy do not overrule, the parties are free to contract as they please, citing cases of marine bailment, Commercial Molasses Corp. v. N. Y. Tank Barge Corp., 314 U.S. 104, 62 S.Ct. 156, 86 L.Ed. 89; of pilotage agreements, Sun Oil Co. v. Dalzell Towing Co., Inc., 287 U.S. 291, 53 S.Ct. 135, 77 L.Ed. 311; of contracts for sale and installation of marine equipment, Newport News Ship-building & Dry Dock Co. v. United States, 4 Cir., 34 F.2d 100; and non-maritime cases, Shafer v. Reo Motors, Inc., 3 Cir., 205 F.2d 685, and Standard Insurance Co. of New York v. Ashland Oil & Refining Co., 10 Cir., 186 F.2d 44.

Ruling upon the exception thus boils down to determining whether the relationship of the parties here is more analogous to contracts of towage or to other types of contracts. Looking to the facts (and we are now limited to only such facts as are disclosed by the pleadings), it appears that libellant's barge was delivered to respondent, and on May 3, 1955, was loaded by respondent with coal. Respondent is engaged in the business of loading coal from railroad hopper cars onto barges in the Ohio River. While the barge was in the care of respondent, after it had been loaded and moored, it sank. Respondent denies liability, among other reasons, by reason of an indemnity agreement entered into between the parties on November 29, 1954, whereby Island Creek, libellant, agreed to save Kenova Terminal, respondent, harmless from all losses

"* * * by reason of any acts done by or resulting from the loading of said barges or other vessels, or acts done in connection with the movement of said barges or other vessels either prior to or subsequent to the loading thereof even though they were caused or contributed to by the negligence of Kenova Terminal Company, or its officers, agents, servants, and employees."

Libellant excepts to that defense because it is in effect a release from all future liability for respondent's negligence and therefore, libellant urges, absolutely void on its face.

Although not mentioned in the exception, libellant's brief raises the additional point that the barge in question sank while moored, and libellant urges that this indemnity agreement does not apply because it only covered losses occasioned by (1) loading the barge, or (2) moving it. Since this defense is not a part of the exception, it is not necessary or proper to decide this question now.

Libellant relates this case to the rationale of the Supreme Court's Bisso case by pointing out that in both cases personal property was delivered into the hands of the respondent; in each case the respondent was engaged to do something with that property—in the Bisso case to tow it to a destination, here to load it with coal; in each case to be returned to the possession of libellant after the particular service had been performed;¹ in each case the property was in the sole and exclusive possession of respondent when the damage complained of was done; and in each case respondent sought by contract to avoid liability for its negligence.

These same comparisons, however, will hold true when the facts of the instant case are compared with a group of cases which hold that a person who is to make some repairs to a ship may contract with the shipowner absolving the repairman from liability for his own negligence. See Hall-Scott Motor Car Co. v. Universal Ins. Co., 9 Cir., 122 F.2d 531, where that court cites as a leading case on this subject a Fourth Circuit case, Newport News Shipbuilding & Dry Dock Co. v. United States, 34 F.2d 100. In the Newport News case, a ship owned by the United States was damaged by fire due to the negligence of the shipyard where the ship was undergoing repair. The majority stated:

"We agree with the judge below when he said:

"`There can be no doubt, I think, that a contract whereby the United States agreed to assume all liability for damage to its vessel while at the yard would be valid. Santa Fe P. & P. Railway Co. v. Grant, 228 U.S. 177, 33 S.Ct. 474, 57 L.Ed. 787.'" 34 F.2d at page 106.

In dissenting, Judge Parker agreed with the majority that a contract could validly be made which relieved the shipyard from liability for its negligence, but he did not feel such a contract was present in that particular case.

The relationship between the parties here did not concern towage. Nothing is presented from the pleadings in this case which would indicate that it should be brought within the scope of those...