In re Spencer Kellogg & Sons

• Decision Date: 24 July 1931
• Docket Number: No. 427.,427.
• Citation: 52 F.2d 129
• Parties: In re SPENCER KELLOGG & SONS, Inc. Ex parte HICKS et al.
• Court: U.S. Court of Appeals — Second Circuit

52 F.2d 129 (1931)

In re SPENCER KELLOGG & SONS, Inc. Ex parte HICKS et al.

No. 427.

Circuit Court of Appeals, Second Circuit.

July 24, 1931.

Bigham, Englar, Jones & Houston, of New York City (D. Roger Englar, Chauncey I. Clark, Leonard J. Matteson, George S. Brengle, and Charles W. Hagan, all of New York City, of counsel), for Spencer, Kellogg & Sons, Inc.

Elizabeth Robinson and Lucien V. Axtell, both of New York City (Charles A. Ellis, of New York City, of counsel), for Burns and others.

Lester Hand Jayne, of New York City, for McEachin and others.

Kurzman & Frank, of New York City (Samuel B. Seidel, and Sidney Newborg, both of New York City, of counsel), for Ilfill and others.

George W. Riley, of Lockport, N. Y., and Oeland & Kuhn, of New York City, for Hicks, administratrix.

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

L. HAND, Circuit Judge.

Spencer Kellogg & Sons, Inc., is a New York corporation engaged in the manufacture of linseed oil, with its principal place of business in Buffalo, where live its chief executive officers. It has however a number of factories in other places, among which is one at Edgewater, New Jersey, on the west shore of the Hudson River opposite Ninety-Sixth street, Manhattan, whence it draws many of its workmen. In order to carry these across to its factory it had maintained a motor-boat, called "The Linseed King," a launch forty-five feet long with a beam of ten feet, equipped with a gasoline engine. This had a small wheel-house forward, slightly raised above the floor of the inclosed cabin which occupied most of the deck space. The sides of the cabin were glass windows, nine on each side, two at each end of each side being movable for ventilation, and allowing a doubtful egress. Two doors, one on each side, gave upon the deck just abaft the wheel-house which was separated from the cabin by an iron railing. A third door, double, opened upon the deck at the after end of the cabin; to each door led a short companionway of a few steps, the cabin's deck being below the main deck. Along each side of the cabin ran a seat, each capable of holding about eighteen men.

It was the custom of the company to send the launch from Edgewater in the early morning to receive workmen at the Manhattan shore, and carry them back to the factory before work began. In the past it had often been much crowded, over eighty men at times finding room to sit or stand in the cabin, whose total superficial area including the wheel-house, was but two hundred and thirty-three square feet, of which the seats took up about one-third. The accident, which is the subject of this suit, happened on Monday morning, December 20, 1926, and arose in the following way. The launch left the Jersey shore before daybreak in charge of one Rohweder, an experienced man, who had been substituted for another some weeks before. In Manhattan there joined him a chauffeur, named Roberts, detailed to give him general assistance, whom we may consider as a deck-hand. When Rohweder came to the New York shore he met drift ice which had come down the river on the tide during the night, driven upon the east shore by the west wind. He pushed through and at Manhattan found a crowd of expectant workmen waiting to be ferried across. How many he and Roberts took on board was not, and in the nature of things, could not, be surely fixed, but the District Judge found the number to be seventy-eight, and of this the company does not complain. It is as nearly right as the nature of the evidence allows; we have no warrant to disturb it. The launch then got under way, and successfully passed through the thicker part of the ice upon her return. When Rohweder thought himself clear, and while at a speed of about seven miles an hour, the launch struck a cake or floe of ice which stove a hole in her port bow about eight by sixteen inches. The evidence as to what struck her is necessarily a little doubtful; it was quite dark and Rohweder could not tell. However, there was still ice about, and the probabilities are too strong to justify upsetting the judge's finding that this caused the hole. The launch at once began to fill and sank in about two minutes. In the interval the workmen fell into a panic, scrambling for the outlets, through which a number of them escaped. Although there were eighty life-preservers on board, either the press prevented the men from reaching them, or their fright paralyzed their judgment. Nevertheless, a number, thrown into the water, reached floating cakes of ice, and were eventually rescued after much exposure. How many were lost was never learned with certainty, and is immaterial to the purposes of this appeal; thirty-five bodies were found.

Some of those injured, and the administrators of some of those drowned, brought actions in the New York courts against the company; others made claim and threatened suit, so that the situation was apt for a proceeding to limit liability. The company filed its petition in March of 1927 and prayed an injunction against all proceedings upon any claim, including claims for workmen's compensation under the New Jersey act, except that those might be filed. On the next day it obtained the usual injunction pendente lite in the same terms, covering not only the claimants themselves, but the New Jersey commission. It surrendered the launch which had been raised, and had a value of fifteen hundred dollars, and procured an order of reference to a commissioner to receive claims. These the claimants filed in due course, and answered the petition, denying the right to limit.

The issues so arising came on for hearing before Hazel, J., and a large amount of evidence was taken, at the conclusion of which he denied the right to limit, and referred the liquidation of all claims to a new commissioner, who heard more evidence and reported back to the court. This report came on for hearing upon exceptions before Patterson, J., who confirmed some of the awards as fixed, and changed the amount of others. No question is raised as to these amounts. Those claimants whom he found to have been in the company's employ, he remitted to their claims under the New Jersey Workmen's Compensation Act, except the administrator of Roberts, who as a maritime worker he thought not subject to state law. The rest recovered general indemnity.

The company appealed because of the denial of its limitation, and for the failure to remit to compensation those claimants who had already applied for work on Saturday, and had been told to come back. The claimants who had been awarded only compensation also appealed. They argued that their contracts were from day to day, and that they were not employed till they reached the factory. Furthermore that the Compensation Act could not apply to a suit in the admiralty, and that if it did, the conduct of the company in enjoining them pendente lite from prosecuting their awards was a repudiation of the contract of compensation on which they were entitled to elect to invoke the company's general liability. The issues therefore are, the right to limit; which claimants are covered by the Compensation Act; its effect in the admiralty; the right of the company to invoke it.

The chief of these is the right to limit, which the company now agrees should not extend to compensation. As to this, the fault must be of an officer high enough in control to charge the company personally. Stover, the manager of the factory at Edgewater, was in that position. He was indeed under the direction of the chief officials in Buffalo, who made frequent visits to Edgewater, and always maintained supervision of this, as of all the other plants, but in their absence he was in charge, and it is not open to doubt that for any fault of his the company was personally liable. In re Jeremiah Smith & Sons, 193 F. 395 (C. C. A. 2); In re P. Sanford Ross, Inc., 204 F. 248 (C. C. A. 2); Eastern S. S. Corp. v. Great Lakes, etc., Co., 256 F. 497 (C. C. A. 1); Parsons v. Empire Transp. Co., 111 F. 202 (C. C. A. 9); In re Pennsylvania R. R. Co., 48 F.(2d) 559 (C. C. A. 2) semble. It is immaterial whether he disregarded his instructions. His fault charged his principal as though the limitation statute did not exist.

The officials at Buffalo had recognized that the launch was not fit to encounter ice, and had directed Stover to discontinue her service as soon as it appeared in the river. Indeed, while she may have been fit to pass through slush, the company's own witnesses conceded that she should not have been exposed to floes or heavy cakes. It was a fault to allow her to go out, when there was reasonable expectation that such ice might be met. The weather had been unseasonable in New York during the first week of December, about fourteen degrees below the usual range, and at an average minimum of about 14° F. Presumably it was colder in the reaches of the Hudson above Manhattan Island. During the next week the cold abated, the minimum being just below freezing and the mean well above. This was a condition which would release any ice formed above, and allow its slow descent. The third week turned cold again, rising only once to freezing, and running as low as seven degrees on the eighteenth. On that day, Saturday, ice came down below Ninety-Sixth street on the Manhattan shore, but by the weight of the evidence none was observed opposite Edgewater on Sunday, and we may take it that at sundown there was no reason to believe that the river was not clear at that point, though there was much ice not many miles above, with knowledge of which Stover was clearly chargeable.

Rohweder, we are to assume, was a competent man. He had instructions from Stover not to press through ice, and if these were enough, it is impossible to charge his superior with fault. We think that they were not. The degree of care exacted in any situation depends, not only upon the likelihood of injury, but on its gravity if it comes. Laying aside...