Brittingham v. Tugboat Underwriting Syndicate

• Decision Date: 12 May 1971
• Docket Number: No. 415,415
• Citation: 277 A.2d 8,262 Md. 134
• Parties: , 1971 A.M.C. 1639 Catherine H. BRITTINGHAM, Executrix of the Estate of John William Brittingham etc. v. The TUGBOAT UNDERWRITING SYNDICATE.
• Court: Maryland Court of Appeals

Page 134

262 Md. 134

277 A.2d 8, 1971 A.M.C. 1639

Catherine H. BRITTINGHAM, Executrix of the Estate of John

William Brittingham etc. v. The TUGBOAT UNDERWRITING SYNDICATE.

No. 415.

Court of Appeals of Maryland.

May 12, 1971.

Raymond S. Smethurst, Jr. and Henry M. Rutledge, Salisbury (Adkins, Potts & Smethurst, Salisbury, on the brief), for appellant.

D. William Simpson, Salisbury (K. King Burnett and Webb, Burnett & Simpson, Salisbury, on the brief), for appellee.

Argued before HAMMOND, C. J., and BARNES, McWILLIAMS, SINGLEY and SMITH, JJ.

HAMMOND, Chief Judge.

The Arundel Corporation sued the estate of John William Brittingham (Brittingham), alleging in count one that it was owed rentals on a steel deck scow it had demised to him, in count two that Brittingham failed to repair and maintain the scow as the lease required, and in count three that Brittingham had converted the scow to his own use. Brittingham filed a counterclaim against Arundel alleging that the scow was unseaworthy, and a third party claim against The Tugboat Underwriting Syndicate (Syndicate), a reciprocal insurer, under Code (1968 Repl.Vol.), Art. 48A, Sub-title 18. The third party claim was that Syndicate on July 19, 1965, had insured Brittingham's diesel tug, the Kitty B, under a policy containing a tower's liability clause, but which contained a typed exclusion which has led to this litigation, reading: 'It is hereby understood and agreed that this policy excludes liability for loss, damage or expense to vessels in tow owned by the assured or affiliated or subsidiary companies or corporations.'

The third party claim went on to allege that Arundel had sued Brittingham's executrix on the grounds that he had allowed the scow while under tow by the Kitty B to capsize and sink in Hooper Strait and that Syndicate had refused to defend, saying the scow was owned by Brittingham (as bareboat charterer) when it sank and the policy excluded coverage under these circumstances.

By agreement Brittingham dismissed the third party claim and Syndicate filed a proceeding for declaratory judgment to determine the coverage afforded by the policy. The parties stipulated the facts and, on motion by Syndicate, Judge Travers summarily declared Syndicate to have no obligation to defend Brittingham and no obligation to pay any judgment Arundel might recover against Brittingham.

John Brittingham had interests as a builder and operator of a building materials business. In July 1965 he bought the tug Kitty B for use in his businesses. He had not before owned or operated a tug or barge One of his employees telephoned Syndicate to obtain insurance coverage on the Kitty B. He learned that the premium would be substantially less if the policy excluded other vessels owned by Brittingham while in tow by the Kitty B and took a policy with this exclusion to save money. Brittingham did not then own any vessel other than the tug. The next day Brittingham leased from Arundel, the steel-decked barge No. 227. After seveal earlier voyages, the Kitty B left Nasonville en route to Salisbury on July 23, 1965 with Barge 227, loaded with slag, in tow. Next morning the barge began to list and was pumped out several times during the day. Early in the morning of July 25 the barge overturned, casting the load of slag into the water. The Kitty B pushed the still floating barge onto a shoal where it was anchored and eventually sank.

Judge Travers ruled that the words 'owned by' in the exclusion clause must be read to include a vessel possessed under a demise or bareboat charter. In contending that he was wrong, Brittingham says the critical words must be read in their plain, unambiguous, ordinary meaning and that they do not have a special meaning in maritime law and practice.

Brittingham concedes that the lease between Arundel and Brittingham, although in parol, was valid, Ruiz Pichirilo v. Maysonet Guzman (1st Cir.), 290 F.2d 812, 813, Rev'd on other grounds, 369 U.S. 698, 82 S.Ct. 1095, 8 L.Ed.2d 205 and that under the lease Brittingham had exclusive possession, command, control and navigation of the scow and therefore held under a demise or bareboat charter. Marcardier v. The Chesapeake Insurance Co., 8 Cranch 39, 49 3 L.Ed. 481, 484. He also agrees that it is well established that a bareboat charterer is for many purposes an owner during the demise and often, if not generally, is called the owner pro hac vice. Gilmore and Black, The Law of Admiralty, §§ 4-20 and 4-23 (1957) states that:

'The demise, in practical effect and in important legal consequence, shifts the possession and control of the vessel from one person to another, just as the shoreside lease of real property shifts many of the incidents of ownership from lessor to lessee. * * * (p. 215)

'(The demise is) an instrument for vesting in one person most of the incidents of ownership in a capital asset of (the shipping) business-the ship-while another retains the general ownership and the right of reversion. (p. 216)

'The most important consequences of the distinction between the demise and other forms of charters flow from the fact that the demise charterer is looked on as the owner of the vessel pro hac vice. * * *

'(H)e qualifies as the 'owner' for purposes of the statutes relating to limitation of liability * * *.

'The vessel, so far as third persons are concerned, is his vessel * * *.' (p. 218)

Black's Law Dictionary (4th Ed.) defines pro hac vice as meaning: 'For this turn; for this one particular occasion.' An owner pro hac vice therefore is an owner for the 'particular occasion' of the charter. The court put it weill in Vitozi v. Balboa Shipping Co. (1st Cir.), 163 F.2d 286, 289:

'In a charter of this kind in which the owner surrenders entire control and possession of the vessel and consequent control over its navigation to the charterer, the latter becomes what is called the owner pro hac vice. That is to say 'without any sale or purchase of the ship' the charterer becomes its owner for the term of the charter 'with the character or legal responsibility of ownership.' Reed v. United States, 11 Wall. 591, 600, 601, 78 U.S. 591, 600, 601, 20 L.Ed. 220. Differently expressed, the charterer under a demise charter party becomes the 'owner of the vessel chartered for the voyage or service stipulated and consequently becomes subject to the duties and responsibilities of ownership.''

See also Leary v. United States, 14 Wall. 607, 20 L.Ed. 756; The Barnstable, 181 U.S. 464, 21 S.Ct. 684, 45 L.Ed. 954; Reed v. Steamship Yaka, 373 U.S. 410, 412, 83 S.Ct. 1349, 1351, 10 L.Ed.2d 448, 451; Van Nood v. Federal Barge Lines, Inc. (E.D.La.), 282 F.Supp. 890, 892; The Kaiser Wilhelm Der Grosse (D.C.), 106 F. 963, 969-970; United States v. S. S. Lucie Schulte (2nd Cir.), 343 F.2d 897, 900.

It was held early that a contract of marine insurance is a maritime contract and the admiralty clause of the federal constitution brings it under federal jurisdiction. The New England Marine Insurance Company v. Dunham,11 Wall. 1, 20 L.Ed. 90.

In Wilburn Boat Co. v. Fireman's Fund Ins. Co., 348 U.S. 310, 313-314, 75 S.Ct. 368, 370, 99 L.Ed. 337, 342-343, in deciding whether state law could control the construction of a maritime insurance contract, the Court reiterated the holding of Dunham and went on to say:

'But it does not follow * * * that every term in every maritime contract can only be controlled by some federally defined admiralty rule. In the field of maritime contracts as in that of maritime torts, the National Government has left much regulatory power in the States (particularly in relation to insurance contracts).

'Congress has not taken over the regulation of marine insurance contracts * * *. But this does not answer the questions presented, since in the absence of controlling Acts of Congress this Court has fashioned a large part of the existing rules that govern admiralty. And States can no more override such judicial rules validly fashioned than they can override Acts of Congress. * * *. Consequently (in deciding whether state law could control warranties in a marine insurance policy) the crucial questions in this case narrow down to these: (1) Is there a judicially established federal admiralty rule governing these warranties? (2) If not, should we fashion one?'

The authorities we have cited show...