Agwilines, Inc. v. Eagle Oil & Shipping Co.

• Decision Date: 29 April 1946
• Docket Number: No. 142.,142.
• Citation: 153 F.2d 869
• Parties: AGWILINES, Inc., v. EAGLE OIL & SHIPPING CO., Limited.
• Court: U.S. Court of Appeals — Second Circuit

153 F.2d 869 (1946)

AGWILINES, Inc., v. EAGLE OIL & SHIPPING CO., Limited.

No. 142.

Circuit Court of Appeals, Second Circuit.

January 10, 1946.

Writ of Certiorari Denied April 29, 1946.

William E. Collins and Burlingham, Veeder, Clark & Hupper, all of New York City (Chauncey I. Clark, of New York City, and Edward A. Neiley, of Washington, D. C., of counsel), for appellant.

Edwin S. Murphy and Kirlin, Campbell, Hickox & Keating, all of New York City (Helen C. Cunningham, of New York City, of counsel), for appellee.

Before L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit Judges.

Writ of Certiorari Denied April 29, 1946. See 66 S.Ct. 980.

L. HAND, Circuit Judge.

The libellant appeals from a decree in the admiralty, because of the insufficiency of the award for the detention of its ship, "Agwidale," resulting from a collision with the claimant's ship, "San Veronico." The parties agreed that the claimant should pay eighty-five per cent of the total damages, and the case was sent to a commissioner, before whom all items of damage were stipulated except that for detention. The Commissioner's report as to this item is not disputed, and was as follows: "As a result of the collision the `Agwidale' was necessarily out of service for nine days, from June 6, 1943, 5:00 A. M. to June 15, 1943, 5:00 A. M.; from June 6, 1943, at 8:20 A. M. until June 11 at 3:30 P. M. she was undergoing repairs, and from the last mentioned date until June 15 at 5:00 A. M. she was waiting for a convoy. During all this period the `Agwidale' was under time charter to the United States through the War Shipping Administration. Pursuant to the provisions of this charter the United States was under obligation to, and did, pay libelant half hire during the repair period, full hire during the period while the `Agwidale' waited for a convoy, and $207.89 for fuel and water. During the repair period libelant paid $240.12 for fuel and water, for which it has not been reimbursed.

"Counsel for the `San Veronico' do not dispute liability for the pecuniary loss of the owners of the `Agwidale,' namely, half hire for the first repair period, and $240.12 for fuel and water paid during this period.

"The advocates for the `Agwidale' claim that the fact that the owners of the `Agwidale' have been paid part hire during the detention period is res inter alios acta, and that the liability of the `San Veronico' is not thereby diminished. Consequently, they claim loss of hire for nine days, equal to $10,942.56 and $448.01, the total disbursements for fuel and water." The only question in the case therefore is — again as stated by the commissioner: "What damages is a shipowner entitled to for loss of use of his ship due to collision, when his charter party hire continues to run and is paid by the charterer?"

It is well settled law that damages for the detention of a commercial vessel are to be measured by the profits which the owner would have realized from her use, had she been free. The Potomac, 105 U.S. 630, 26 L.Ed. 1194, The Conqueror, 166 U.S. 110, 133, 17 S.Ct. 510, 41 L.Ed. 937. We have so decided many times, the last being in Navigazione Libera Triestina v. Newtown Creek Towing Co., 2 Cir., 98 F.2d 694, 699. The dispute here is therefore as to what profits the libellant lost by the detention; and we find it hard to believe that there could be any doubt about the answer, if the inquiry were confined to the owner's personal loss. Having parted with all use of the vessel to the United States during the detention, the libellant could not have made profits from that use; only so far as the detention prevented it from collecting the consideration — the hire — in exchange for which it had parted with that use, could it be damaged. To this the libellant makes two answers, the first of which is that its loss was the value of the ship's use, whether the libellant personally received any benefit or not, because it does not lie in a tortfeasor's mouth to say that some third person — in this case the charterer — has indemnified his victim for his loss. S. H. Kress Co. v. Bullock Shoe Co., 5 Cir., 56 F.2d 713; Shea v. Rettie, 287 Mass. 454, 192 N.E. 44, 95 A. L.R. 571; Elmer v. Fessenden, 154 Mass. 427, 28 N.E. 299; Campbell v. Sutliff, 193 Wis. 370, 214 N.W. 374, 53 A.L.R. 771; Regan v. New York & N. E. R. Co., 60 Conn. 124, 22 A. 503, 25 Am.St.Rep. 306; Restatement of Torts, § 920 Comment (e). That doctrine we accept, but it has no application to the facts before us; for it presupposes that the tortfeasor has caused a loss, since otherwise it is absurd to speak of indemnity. As we have just said, the libellant suffered no loss from the detention of the ship, except the loss of the half hire during the repairs. By the charter-party it had already parted with all right to her use, and the collision could not result in depriving it of what it did not have. The charterer did indeed suffer a loss, for which, if we could, we should allow it to recover; but this branch of the libellant's argument does not stand upon the charterer's loss. The fact that it chances that the value of the use was the same as the hire, and that the libellant only claims the amount of hire must not disguise the fact that the payment of hire cannot be the measure of the loss of either owner or charterer. This would at once appear, if the value of the use had fallen after the charterparty was made; for it would then be plain that the collision had caused the charterer, not the loss of the hire for which it was bound anyway, but the loss of a lesser amount. And, conversely, if the value of the use had risen, although on the libellant's theory the whole hire would be recoverable, it would not measure the charterer's loss, and it would not measure the owner's, even though we were to assume that the owner suffered any loss.

The second ground for recovery is that the libellant, as owner, should be allowed to sue for the charterer's loss on the same theory that a ship recovers as bailee of her cargo for cargo losses, as in effect we held in Pool Shipping Co. v. United States, 2 Cir., 33 F.2d 275, in accord with recognized admiralty practice. To that, however, Robins Dry Dock & Repair Co. v. Flint et al., 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290, is an answer. The charterer there sued to recover his loss from a detention caused by the negligence of a drydocker who had broken the ship's propeller. When the case was before us (2 Cir., 13 F.2d 3), we held that, although the charterer had had no proprietary interest in the ship and no contract with the drydocker, the drydocker could not protect himself by the ordinary doctrine that a tortfeasor is not liable for remote damages, because the whole loss from detention of the ship was to be apprehended from his lack of care, whether the owner bore it all, or shared it with a charterer; and that, the whole loss being therefore a direct consequence of his negligence, he should not be allowed to cut down his liability. As part of our argument we said that the owner could have sued on behalf of the charterer for the charterer's share in their joint loss, in analogy to suits by a ship as bailee of her cargo — the very position now taken by the libellant at bar. The possible objection that the owner was not a party libellant (Hines v. Sangstad S. S. Co., 1 Cir., 266 F. 502, we disregarded because the respondent had failed to assign this procedural defect as error. To all of this the Supreme Court said "no." It thought that the only basis for charging the drydocker with liability was because he had prevented the performance of the charterparty by the promisor — the owner — and that interference by a third person with the performance of a contract was an actionable wrong only if it was intentional. The Court thought it irrelevant that this resulted in exonerating the drydocker from nearly all liability through the fortuity that the profitable use of the ship had been divided between the owner and charterer: the difficulty went deeper; the drydocker had committed no legal wrong against the charterer at all, though he had caused it serious damage. Perhaps it was not necessary after so holding to consider our argument that the owner might be treated as suing on behalf of the charterer; but the court did so and definitely repudiated it, as appears by the passage from the opinion on page 309, of 275 U.S. 303, 48 S.Ct. 134, 72 L.Ed. 290, which we quote in the margin.¹ In the face of this decision we cannot see how we can do otherwise than affirm the decree at bar; if any change is to be made the Supreme Court must make it. And indeed, even though the matter were open to us, we should be faced with the decision of the Court of Appeal in England, decided upon facts which, so far as we can see, were on all fours with those before us. Chargeurs Reunis etc. v. English & American Shipping Co., 9 Lloyd's List L. R. 464.

Decree affirmed.

CLARK, Circuit Judge (dissenting).

I take it as agreed that but for the payment by the United States to the libelant of a portion of the charter hire, pursuant to the charter, libelant would recover complete compensation for the loss of use of its vessel due to claimant's act — computed here at the charter rate, since that was the only evidence of value offered. That being so, we have the rather startling result that claimant receives the bonanza of a substantial reduction in damages through the mere chance that its victim has a favorable contract with another. The case viewed as requiring this result, Robins Dry Dock & Repair Co. v. Flint, 275 U.S. 303, 48 S.Ct. 134, 135, 72 L.Ed. 290, has no such effect; there the action was by the charterers, and the Court quite scrupulously avoided a decision beyond the issue before it or casting doubt upon our premise below (2 Cir., 13 F.2d 3) that the owner could sue. It merely disagreed with our further deduction that hence the charterers also could sue; indeed, it seems to assume that the owner — who...