Dibrell Bros v. Prince Line

• Decision Date: 23 May 1932
• Docket Number: No. 305.,305.
• Citation: 58 F.2d 959
• Parties: DIBRELL BROS., Inc., v. PRINCE LINE, Ltd.
• Court: U.S. Court of Appeals — Second Circuit

58 F.2d 959 (1932)

DIBRELL BROS., Inc., v. PRINCE LINE, Ltd.

No. 305.

Circuit Court of Appeals, Second Circuit.

May 23, 1932.

Kirlin, Campbell, Hickox, Keating & McGrann, of New York City (L. de Grove Potter, of New York City, of counsel), for appellant.

Harry D. Thirkield, of New York City, for appellee.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

SWAN, Circuit Judge.

Libelant shipped hogsheads of tobacco on board the respondent's vessel for common carriage from Norfolk, Va., to Kobe, Japan. During the voyage some of the hogsheads were damaged by sea water used to extinguish a fire in a bunker compartment adjacent to that in which the tobacco was stowed. The libel seeks general average contribution from the respondent not only for the ship's share, but also for the share chargeable to sound cargo which the vessel delivered without taking security for general average contribution. The answer admits that the libelant sustained a general average loss, but sets up as affirmative defenses (1) that the master did not know this fact when the cargo was discharged; and (2) that a notice clause in the bill of lading was not complied with. On exceptions these defenses were stricken out as insufficient in law, and an interlocutory decree was entered for the libelant upon the pleadings.

It is conceded that the appellant is liable for the vessel's proportionate share of the general average loss suffered by the libelant. Each of the defenses alleged goes only to so much of the loss as would be recoverable from other cargo had the master taken security for the payment of such cargo's contributive shares. As to this portion of the libelant's loss the suit is in reality one to recover damages (equal in amount to the general average contributions recoverable from the owners of sound cargo) caused by the master's breach of his fiduciary duty, as a trustee for all interests in general average, in delivering the sound cargo without exacting security for the benefit of cargo sacrificed by the general average act. See The Santa Ana, 154 F. 800 (C. C. A. 9); Heye v. North German Lloyd, 33 F. 60, 70, 2 L. R. A. 287 (S. D. N. Y.); The Caserta,¹ 1932 A. M. C. 51, 60 (D. C. S. D. N. Y.); Crooks v. Allan, 5 Q. B. D. 38; Gillett v. Ellis, 11 Ill. 579, 582; Lowndes, General Average (6th Ed.) p. 397. That such a duty exists is not denied; only the scope of it is in dispute. The libelant contended, and the court below held, that the master, and hence the shipowner, was under an absolute duty either to preserve the lien or to exact security for the benefit of the sacrificed cargo, while the appellant argues that the duty is merely to use reasonable care not to impair the sacrificed cargo's right to contribution by failing to exact security therefor from the owners of sound cargo. Hence the appellant urges not only that its first defense is valid, but also that the libel itself is defective in not alleging negligence in respect to the master's failure to exact security.

We should hesitate to subscribe to the broad proposition that whenever a general average loss has occurred the master is absolutely bound, whatever the circumstances, to protect an owner of sacrificed cargo in his right to general average contribution. This court has held that the master must deliver cargo upon the tender of reasonable security F. H. Leggett & Co. v. 500 Cases of Tomatoes, 15 F.(2d) 270, and it would seem to follow that he would not be liable to owners of sacrificed cargo should the security fail through no fault of his. No more, it may be persuasively argued, should he be liable for failure to exact security at all, where he is ignorant of a cargo owner's general average loss and without fault in failing to know it. But a situation would seldom arise in which the master would be without fault in failing to know the sacrifice. Knowing necessarily of the general average act, he should, at the least, be bound to use reasonable diligence to ascertain its effects. He cannot...