May v. Packetfahrt Aktiengesellschaft v. 14 8212 15, 1933

• Decision Date: 04 December 1933
• Docket Number: HAMBURG-AMERIKANISCHE,No. 80,80
• Parties: MAY et al. v. PACKETFAHRT AKTIENGESELLSCHAFT. Argued Nov. 14—15, 1933
• Court: U.S. Supreme Court

290 U.S. 333

54 S.Ct. 162

78 L.Ed. 348

MAY et al.

v HAMBURG-AMERIKANISCHE PACKETFAHRT AKTIENGESELLSCHAFT.

No. 80.

Argued Nov. 14—15, 1933.

Decided Dec. 4, 1933.

[Syllabus from pages 333-334 intentionally omitted] Messrs. D. Roger Englar and Henry M. Longley, both of New York City, for petitioners.

Mr. John W. Griffin, of New York City, for respondent.

[Argument of Counsel from pages 335-338 intentionally omitted] Mr. Justice CARDOZO delivered the opinion of the Court.

The assignee of cargo owners filed libels against the respondent, the owner of the Isis, to recover moneys deposited as security for general average contributions, the deposit being exacted by the respondent as a condition of delivery.

The Isis, a vessel of about 7,000 tons, sailed from loading ports on the Pacific Coast with cargo destined for Bremen, Hamburg and Antwerp. She was then seaworthy in hull and gear, and fitted in all respects for the intended voyage. In the Weser river, not far from Bremen, Germany, her first port of discharge, she stranded by reason of negligent navigation with damage to her rudder stock and also to the rudder blade. Aided by tugs, she continued up the river to Bremen, disclosing, as she moved, a tendency to sheer to starboard. On arrival at that port, she discharged her Bremen cargo, and there was then an inspection of the damage. The rudder stock had been twisted about 45 degrees. To ascertain the condition of the blade, the vessel was put in a dry dock and kept there a few hours. The examiners reported that the blade was intact. In fact, the lower part of it was bent to starboard to the extent of about five degrees. The inspection was after dark with the bottom of the rudder still under water. The two courts below have concurred in a finding that the use of reasonable care would have caused the bend to be discovered.

The head office of the owner at Hamburg was notified of the mishap to the vessel before she landed at Bremen, and the marine superintendent was sent to meet her. The superintendent, Reichenbacher, and the master of the vessel, Krueger, consulted, along with others, as to what ought to be done. Bremen had adequate facilities for the making of complete repairs, but it would have taken about two weeks to make them. To save time and expense to the vessel and her cargo, the decision was made to send her to Hamburg about seventy miles away, the cargo still aboard. Before a start was made, the rudder was lashed amidships so as to be incapable of motion. The vessel then set forth in the towage of three tugs, one of them in front, and one on either side. No harm befell for a distance of about six miles. Then, at or near the junction of the Weser and Lesum Rivers, the pilot in control changed her course to starboard in order to pass a vessel coming up. There is a finding that her navigation at this point was unskillful and negligent, in that she was driven at too high a speed and too close to the edge of the channel. At all events, in passing she made a sheer to star- board which the tugs and her engines were unable to control. She was stranded hard and fast amidships on a sand spit near the bank.

With the aid of tugs and lighters the vessel and the cargo were brought back to Bremen, where the new damage was repaired. It was in the course of these repairs that the bend in the rudder was observed.¹ In the meantime the entire cargo was transshipped to Antwerp. Before delivery at destination, the respondent made demand of the consignees that they deposit sums of cash as security for the payment of general average contributions to the sacrifices and expenses due to the two strandings. The bills of lading contain what is known as the Jason clause (The Jason, 225 U.S. 32, 49, 32 S.Ct. 560, 56 L.Ed. 969) whereby the consignees agree that, if the shipowner has used due diligence to make the ship seaworthy, the cargo is to be liable in general average when the sacrifice or expense results from negligent navigation. The form of the clause applicable to nearly all the shipments is stated in the margin.² For a small part of the shipments the form is slightly different, but no point is made that there is any difference of meaning. Under these clauses the consignees do not dispute the liability of the cargo for general average contributions in respect of the first standing. They do dispute the liability in respect of the second. To recover their deposits to the amount of that excess, they transferred their claims to an assignee by whom five libels, afterwards consolidated, were filed against the owner. The District Court, confirming the report of a commissioner, gave judgment for the defendant. 57 F.(2d) 265. The Court of Appeals for the Second Circuit affirmed (63 F.(2d) 248), though in so doing it did not agree with all the findings below. The libelant, May, joined the stipulators for costs (Indemnity Insurance Company of North America and Royal Indemnity Company) in a petition to review the decree of affirmance. A writ of certiorari brings the case here.

1. The first question to be determined is whether the cargo must contribute to the sacrifices and expenses resulting from the second stranding if there was a negligent failure by the shipowner to make the ship seaworthy when she left her dock at Bremen.

Until the enactment of the Harter Act (February 13, 1893, c. 105, § 3, 27 Stat. 445, 46 U.S.C. § 192 (46 USCA § 192)), a shipowner was not at liberty by any contract with the shipper to rid himself of liability to the owners of the cargo for damages resulting from the negligence of the master or the crew. Liverpool & G. W. Steam Co. v. Phenix Insurance Co. 129 U.S. 397, 438, 9 S.Ct. 469, 32 L.Ed. 788; The Delaware, 161 U.S. 459, 471, 16 S.Ct. 516, 40 L.Ed. 771; The Jason, supra, 225 U.S. page 49, 32 S.Ct. 560, 56 L.Ed. 969; The Willdomino (C.C.A.) 300 F. 5, 9. Section 3 of the Harter Act³ was the grant of a new immunity. Neither the vessel nor her owner was to be liable thereafter for damage or loss resulting from faults or errors in navigation or in management, if the owner had complied with a prescribed condition. The condition was that he must have exercised due diligence to make the vessel in all respects seaworthy and properly manned, equipped, and supplied. If that condition was not fulfilled, there was liability for negligence in accordance with the ancient rule. Release from liability for negligence when effected by the act did not mean, however, that an obligation was laid upon the cargo to contribute to general average. The Irrawaddy, 171 U.S. 187, 18 S.Ct. 831, 43 L.Ed. 130. To create that obligation there was need of an agreement. For a time there was doubt whether such an agreement, if made, would be consistent with public policy. The doubt was dispelled by the decision in The Jason, supra. 'In our opinion, so far as the Harter act has relieved the shipowner from responsibility for the negligence of his master and crew, it is no longer against the policy of the law for him to contract with the cargo owners for a participation in general average contribution growing out of such negligence; and since the clause contained in the bills of lading of the Jason's cargo admits the shipowner to share in the general average only under circumstances where by the act he is relieved from responsibility, the provision in question is valid, and entitles him to contribution under the circumstances stated.' Id., 225 U.S. page 55, 32 S.Ct. 560, 564, 56 L.Ed. 969.

The Isis being seaworthy when she broke ground in the Pacific, the cargo was under a duty to contribute to the expenses of the first stranding, which occurred as the result of faulty navigation before the arrival of the ship at Bremen. Neither here nor it the courts below has there been any contention to the contrary. Whether a like duty existed in respect of the expenses of the second stranding is not so easily determined. The only negligence for which immunity is given by section 3 of the Harter Act is negligence in the navigation or management of the ship. The Carib Prince, 170 U.S. 655, 661, 662, 18 S.Ct. 753, 42 L.Ed. 1181; International Navigation Co. v. Farr & Bailey Mfg. Co., 181 U.S. 218, 21 S.Ct. 591, 45 L.Ed. 830. If the master of the Isis had acted on his own responsibility at Bremen in sending the vessel on, the fault would have been negligence in management, or so we may assume. But that is not what happened. The owner intervened by its marine superintendent, who was sent from Hamburg to Bremen to inspect the disabled vessel and determine what to do. He consulted with the master and others. The decision in the end was his. This he tells us very frankly. If reasonable diligence would have shown that the vessel was unseaworthy when he sent her on her way, there was something more than an error in navigation or management on the part of master or of crew. There was a failure by an owner to fulfill the condition on which immunity depended.

We do not forget that seaworthiness is determined for many purposes according to the state of things existing at the beginning of the voyage. This is true of a warranty of seaworthiness in charter parties or in contracts of affreightment. The Edwin I. Morrison, 153 U.S. 199, 210, 14 S.Ct. 823, 38 L.Ed. 688; The Caledonia (C.C.) 43 F. 681, 685; Id., 157 U.S. 124, 130, 15 S.Ct. 537, 39 L.Ed. 644; Earle & Stoddart v. Ellerman's Wilson Line, 287 U.S. 420, 426, 53 S.Ct. 200, 77 L.Ed. 403; McFadden v. Blue Star Line, (1905) 1 K.B. 697, 703. It is true of the like warranty in contracts of marine insurance. Union Ins. Co. v. Smith, 124 U.S. 405, 427, 8 S.Ct. 534, 31 L.Ed. 497; Smith v. Northwestern Fire & Marine Ins. Co., 246 N.Y. 349, 359, 363, 364, 159 N.E. 87. But the provisions of the Harter Act relieving an owner from liability to the cargo for errors of management of navigation do not charge him with a warranty. What they say to him is this, that if he wishes the immunity he may have it, but only upon...