Fyfe v. Pan-Atlantic SS Corporation

• Decision Date: 09 December 1940
• Docket Number: No. 390.,390.
• Parties: FYFE et al. v. PAN-ATLANTIC S. S. CORPORATION.
• Court: U.S. Court of Appeals — Second Circuit

114 F.2d 72 (1940)

FYFE et al. v. PAN-ATLANTIC S. S. CORPORATION.

No. 390.

Circuit Court of Appeals, Second Circuit.

July 15, 1940.

Rehearing Denied August 26, 1940.

Writ of Certiorari Denied December 9, 1940.

COPYRIGHT MATERIAL OMITTED

Henry N. Longley, Bigham, Englar, Jones & Houston, John W. R. Zisgen, and Haight, Griffin, Deming & Gardner, all of New York City, for libelants-appellees.

Russell C. Gay, Barber, Matters & Gay, and Burlingham, Veeder, Clark & Hupper, all of New York City, for respondent-appellant.

Before CHASE, CLARK, and PATTERSON, Circuit Judges.

Writ of Certiorari Denied December 9, 1940. See 61 S.Ct. 319, 85 L.Ed. ___.

On rehearing: before CHASE and CLARK, Circuit Judges.

CLARK, Circuit Judge.

This appeal involves an injury by fire in New York harbor to 500 bales of Manila fibre and 67 coils of Manila rope delivered to the Barber-Wilhelmsen Line at Philippine ports, for shipment, via New York and New Orleans, Louisiana, with on-carriage by rail, to Peoria, Illinois, and St. Louis, Missouri, respectively. Libelants became the owners of the goods before their arrival in New York. The through bills of lading issued by the Barber-Wilhelmsen Line called for carriage of the goods by that line to New Orleans. Barber-Wilhelmsen operated between Manila and New York, but made no calls at Gulf ports. It was within the contemplation of all parties that Barber-Wilhelmsen would arrange at New York for transshipment by water to New Orleans.

Respondent, Pan-Atlantic Steamship Corporation, maintained a freight service between New York and New Orleans. Pan-Atlantic had a standing arrangement with Barber-Wilhelmsen, pursuant to which cargoes brought by Barber-Wilhelmsen to New York were to be on-carried by Pan-Atlantic from New York to Gulf ports. The freight charge indicated on the through ocean bill of lading was to be divided in the ratio of 60 to 40 per cent between the two lines, 60 per cent going to Barber-Wilhelmsen. The cost of transferring the cargo from one ship to the other at New York was to be shared on the same 60-40 basis.

Transshipment of libelants' fibre and rope at New York commenced in accordance with this underlying agreement. Barber-Wilhelmsen notified Pan-Atlantic of the arrival of the cargo, and requested that the latter arrange for the services of a lighter. Pan-Atlantic instructed the Manhattan Lighterage Corporation to receive the goods at the Barber-Wilhelmsen dock and remove them to the Pan-Atlantic pier. Manhattan dispatched its lighter "Sydney" to perform the task. After the "Sydney" had received the fibre and rope and had arrived at the Pan-Atlantic pier, a fire broke out on the "Sydney" due to the negligence of her crew, and the merchandise was damaged. The Pan-Atlantic vessel which was to carry the cargo to New Orleans had not yet tied up at the pier.

Libelants brought suit against Barber-Wilhelmsen, Pan-Atlantic, and Manhattan and its lighter "Sydney." Barber-Wilhelmsen's motion to dismiss the libel as to it was sustained. Thereafter Manhattan and the "Sydney" were discharged under the Fire Statute, 46 U.S.C.A. § 182, discussed below. The action proceeded against Pan-Atlantic alone, and resulted in an interlocutory decree in favor of libelants, with an order of reference for the ascertainment of the amount of the damages.

1. The district court found that Manhattan was respondent's agent to lighter the goods from one vessel to another in New York harbor. In a thoughtful opinion the court expressed the view that the lighter "Sydney" was the agent of Barber-Wilhelmsen and Pan-Atlantic as joint principals. Whether lighters carrying cargo to a main carrier are acting on behalf of the main carrier, so that he receives the goods when they do, is a question of fact. Robinson on Admiralty, 492. Pan-Atlantic had a general contract with Manhattan for lightering its shipments. Manhattan was not an independent carrier. It did not agree to on-carry a cargo in return for a percentage of the through freight charge. The through freight charge was shared by Barber-Wilhelmsen and Pan-Atlantic, and together they bore the expense of hiring Manhattan to ferry the cargo from one ship to another. While Barber-Wilhelmsen and Pan-Atlantic were independent carriers in relation to each other, and neither was responsible for damage occurring while the cargo was in the other's sole charge, they were engaged in a joint enterprise in so far as the lighterage in New York was concerned.

The finding of the district court that Manhattan was respondent's agent for the transshipment of the goods at New York is therefore amply supported by the facts. It matters little whether the lighterage be conceived of as the initial act in on-carriage from New York to New Orleans (Bulkley v. Naumkeag Steam Cotton Co., 24 How. 386, 65 U.S. 386, 16 L.Ed. 599) or whether the lighterage be deemed an intermediate event in a through carriage from the Philippines to New Orleans (Colton v. New York & Cuba Mail S. S. Co., 2 Cir., 27 F.2d 671). In either case the lighter is but a substitute for the ship, and the carrier is responsible for damage suffered through the act of its agent during the transshipment.

2. This finding of agency, so far as it indicates a liability, not only of Manhattan, but also of Barber-Wilhelmsen, is not in harmony with the theory upon which the latter concern succeeded in obtaining a dismissal of the libel as to it. The order of dismissal, signed by another district judge, was accompanied by an opinion stating that Manhattan was a connecting carrier (for whose negligence the initial carrier was not responsible), rather than an agent of the two main carriers. That ruling was made on the basis of the libel alone, wherein it was alleged that the goods were delivered in good condition into Manhattan's possession and while there were injured through Manhattan's negligence. It thus appears to have been a proper construction of the situation as revealed by the pleading then before the court. But the facts adduced at the trial showed a different situation from that indicated by the libel, and substantiated the finding of agency made below.

Respondent has urged that this finding of agency was improper under principles of res judicata and the law of the case. It is mistaken in that contention, however. A ruling that a complaint or libel fails to state a cause of action does not preclude the filing of an amended complaint or libel, in which are included such additional facts as would make the cause of action valid. True, under modern principles, failure to amend upon dismissal of a complaint under circumstances where amendment was permissible should bar the institution of a second suit. See Northern Pacific Ry. Co. v. Slaght, 205 U.S. 122, 27 S.Ct. 442, 51 L.Ed. 738; Clark, Code Pleading, 367, and cases cited; von Moschzisker, Res Judicata, 38 Yale L.J. 299, 318-320; 9 Yale L.J. 387. Even this has not always been the rule, and plaintiffs, despite the entry of final judgment against them, have in the past been permitted to file new complaints in which the original defect has been remedied. Cf. Gould v. Evansville & C. R. R., 91 U.S. 526, 23 L.Ed. 416; Clark, loc. cit. supra.

Here libelants without doubt could have obtained permission to amend their libel after exceptions to it had been sustained. Admiralty Rule 23, 28 U.S.C.A. following section 723; Hughes v. Roosevelt, 2 Cir., 107 F.2d 901. They did not seek to amend as to Barber-Wilhelmsen, and allowed final judgment to go against them in favor of that respondent. They did, however, proceed to trial against the present respondent; at the trial the missing facts were proved, and a cause of action was made out. In this state of the record, an amendment of the pleadings to conform to the proof was, of course, permissible. The Roslyn, 2 Cir., 93 F.2d 278; cf. Rule 15(b), Federal Rules of Civil Procedure, 28 U.S. C.A. following section 723c. So far as concerns Pan-Atlantic, libelants may therefore be deemed to have amended their libel and to have stated a sufficient cause of action in their libel as amended. It is regrettable if one of two joint principals may have succeeded in permanently escaping a share of a liability while the other is justly ensnared, but such are the fortunes of law.

It should be noted further that respondent's relationship with Manhattan was not in issue on the hearing which concerned Barber-Wilhelmsen's relations with Manhattan, and that somewhat different facts apply. Thus, it was respondent that actually hired Manhattan for the task of reshipment. Hence the ruling exonerating Barber-Wilhelmsen should not be res judicata in any event in favor of respondent. George A. Fuller Co. v. Otis Elevator Co., 245 U.S. 489, 491, 38 S.Ct. 180, 62 L.Ed. 422; The No. 34, 2 Cir., 25 F.2d 602; Moran Towing & Transportation Co., Inc. v. Navigazione Libera Triestina, S.A., 2 Cir., 92 F.2d 37. And hence cases cited by respondent as to the effect of a judgment in favor of the principal upon a claim against the surety, or of negligence of one party to an automobile accident upon later suits by that same party, are not in point. Kramer v. Morgan, 2 Cir., 85 F.2d 96; Good Health Dairy Products Corp. v. Emery, 275 N.Y. 14, 9 N.E.2d 758, 112 A.L.R. 401.

3. The bill of lading, however, by its terms expressly exempted the main carriers from liability for damage to the cargo while on lighters, and stated that each main carrier "shall be responsible only for the goods whilst same are in their own personal custody." We agree with the construction placed by the district court upon these clauses, and with its conclusion that so construed the attempt to limit liability was unlawful. The shipper had been issued a through bill of lading, and after doing this the main carriers could not contract against their liability during transshipment. Colton v. New York & Cuba Mail S. S. Co., supra; Harter Act, § 1, 46 U.S.C.A. § 190, making unlawful provisions of a...