City of Newark v. Mills

• Decision Date: 08 October 1929
• Docket Number: No. 3992.,3992.
• Citation: 35 F.2d 110
• Parties: CITY OF NEWARK v. MILLS et al. THE SOUTH SHORE.
• Court: U.S. Court of Appeals — Third Circuit

35 F.2d 110 (1929)

CITY OF NEWARK v. MILLS et al. THE SOUTH SHORE.

No. 3992.

Circuit Court of Appeals, Third Circuit.

October 8, 1929.

Wall, Haight, Carey & Hartpence, of Jersey City, N. J. (Thomas G. Haight, of Jersey City, N. J., Charles M. Myers, of Newark, N. J., and George G. Tennant, Jr., of Jersey City, N. J., of counsel), for appellant.

Macklin, Brown, Lenahan & Speer, of New York City, and McDermott, Enright & Carpenter, of Jersey City, N. J. (Horace L. Cheyney, of New York City, of counsel), for appellee.

Before WOOLLEY, Circuit Judge, and GIBSON and McVICAR, District Judges.

WOOLLEY, Circuit Judge.

The City of Newark agreed for a consideration to furnish William M. Mills and Andrew H. Mills storage space at Port Newark for their fleet of steam excursion boats during the winter of 1926-27. Eight boats were brought in and tied up at the dock as agreed upon. One night the Steamer "South Shore" suddenly began to fill and the next morning she sank without any known reason, blocking the head of the channel and preventing the use of the dock by other craft. The City called upon the Mills brothers to raise and move the boat. They refused and formally abandoned her. The City, first notifying Mills brothers of its purpose, then raised and moved the wreck at their cost. Upon their refusal to pay, the City brought suit against them on the contract in the Essex County Circuit Court to recover the moneys laid out and expended in raising and moving the wreck in the sum of $21,200. Thereupon William M. Mills and Andrew H. Mills, as former owners of the Steamer South Shore, filed a petition in the District Court of the United States for the District of New Jersey for exoneration from and limitation of liability for damages and loss consequent upon the sinking of the steamer. In accordance with practice, the court restrained the city from further proceeding in the state action until the hearing and determination of the petition. After stipulation for the value of the steamer and her pending freight in the sum of $1.00 and issuance of a monition and appearance of the City as claimant for damages in the sum named, the trial court, first stating in its opinion that notwithstanding the contract the statutes limiting liability apply to the case, entered a decree by which it found that the sinking of the South Shore was not caused by the design or neglect of the petitioners and did not occur with their privity or knowledge, and held that they be forever exempted and discharged from all loss and liability arising from the sinking of the boat.

On this appeal by the City we are concerned with the validity of the decree without regard to the reasons that moved the trial court to enter it. Clinton M. & M. Co. v. Cochran (C. C. A.) 247 F. 449, 450. Its validity rests primarily on the pleadings which consist of a petition and answer. The petition is in the form usually pursued when an owner of a boat, lost or in collision, claims limitation of liability as provided by sections 4283, 4284 and 4285 of the Revised Statutes (46 USCA §§ 183-185) and supplementary and amendatory statutes, asserting that the sinking of the boat in this instance was not caused by any fault or negligence on the part of the petitioners but was due solely to causes beyond their control and alleging that after the boat had sunk they abandoned her.

The City appearing as claimant admitted by its answer practically all the facts averred in the petition including that of abandonment. It, however, set up as a separate defense to the petitioners' claim for limitation of liability the contract between itself and the Mills brothers substantially as we have stated it with the additional averment that by this contract the petitioners had agreed and promised that they would "shift and remove" the Steamer "South Shore" from the dock on demand of the City any time during the term of the lease or at its termination, and that as the petitioners had refused to raise and move the boat on its repeated demands, the City brought the state action for breach of the contract, claiming in this defense that, as the contract is purely personal, the petitioners are not entitled to the benefit of the limitation of liability which the statutes afford.

On this statement of facts and contention of law the City submitted that the primary question involved is whether the petitioners are entitled to limit their liability under the provisions of section 4283 et seq., of the Revised Statutes (46 USCA § 183 et seq.) and thus are entitled to have the state suit permanently enjoined, a question which, in turn, will depend upon answers to the questions:

(1) Do the limited liability statutes apply to personal contracts of shipowners?

(2) Was the contract upon which the state suit is based of such a character?

Concluding with the statement that the case does not involve a question of ultimate liability nor does it deprive the City of its right to pursue its action in the state court if the statutes do not apply, citing The Erie Lighter 108 (D. C.) 250 F. 490, 493, a matter which, although affected and, it may be, controlled by the later decision in Hartford Accident & Indemnity Co. v. Southern Pacific Co., 273 U. S. 207, 47 S. Ct. 357, 71 L. Ed. 612, will not arise for decision.

The City seems to concede that the petitioners were under no obligation imposed by law to raise the sunken boat unless they had entered into a contract to do so; or, stated differently, the City does not contest the petitioners' right — barring a personal contract to the contrary — to abandon the sunken boat and thereby escape further liability conformably with the rule in admiralty in that regard. The Irving F. Ross, Petitioner (D. C.) 8 F.(2d) 313; Highlands Navigation Corporation, Petitioner (C. C. A.) 29 F. (2d) 37. Nor, seemingly, does the City question the petitioners' right, as matter of law, to have their liability for damages limited under the cited statutes if their liability was not voluntarily assumed under a personal contract. Great Lakes Towing Co. v. Mill Transportation Co. (C. C. A.) 155 F. 11, 22 L. R. A. (N. S.) 769; Id., 207 U. S. 597, 28 S. Ct. 262, 52 L. Ed. 357; Benedict on Admiralty (5th Ed.) 476. Therefore it would appear, as the case has developed before us, that we are not called upon to decide the first broad general question whether "the limited liability statutes apply to personal contracts of shipowners" (as distinguished from contracts imputed to them by law and liability for acts of others in virtue of their ownership of the vessel) by reviewing the decisions on that subject, Richardson v. Harmon, 222 U. S. 96, 106, 32 S. Ct. 27, 56 L. Ed. 110; Pendleton v. Benner Line, 246 U. S. 353, 356, 357, 38 S. Ct. 330, 62 L. Ed. 770; Luckenbach v. Sugar Refining Co., 248 U. S. 139, 149, 39 S. Ct. 53, 63 L. Ed. 170, 1 A. L. R. 1522; Capitol Transportation Co. v. Cambria Steel Co., 249 U. S. 334, 336, 39 S. Ct. 292, 63 L. Ed. 631; Great Lakes Towing Co. v. Mill Transportation Co. (C. C. A.) 155 F. 11, 22 L. R. A. (N. S.) 769; Id., 207 U. S. 597, 28 S. Ct. 262, 52 L. Ed. 357; but are restricted in our decision to the question, assuming without deciding that the statutes do not apply to liabilities assumed by personal contracts, whether in the contract in this case — admittedly personal — the petitioners engaged to raise the sunken vessel and...