Pennsylvania Railroad Co. v. McAllister Brothers

• Decision Date: 30 January 1956
• Citation: 137 F. Supp. 788
• Parties: The PENNSYLVANIA RAILROAD COMPANY, Libellant, v. McALLISTER BROTHERS, Inc., and McAllister Lighterage Line, Inc., Respondents.
• Court: U.S. District Court — Southern District of New York

137 F. Supp. 788

The PENNSYLVANIA RAILROAD COMPANY, Libellant, v. McALLISTER BROTHERS, Inc., and McAllister Lighterage Line, Inc., Respondents.

United States District Court S. D. New York.

January 30, 1956.

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Burlingham, Hupper & Kennedy, New York City, for libellant, Eugene Underwood and Richard W. Palmer, New York City, of counsel.

Purdy, Lamb & Catoggio, New York City, for respondents. Edmund F. Lamb, New York City, of counsel.

WEINFELD, District Judge.

Libellant, the Pennsylvania Railroad Company (hereinafter called "Pennsylvania"), seeks to recover from the respondent, McAllister Lighterage Line, Inc. (hereinafter called "McAllister"), $20,000 as indemnity which it paid in settlement of an action brought by one Andrew Ceci against both libellant and respondent in the Supreme Court of the State of New York.¹ Ceci had received injuries on a barge, the McAllister No. 108, which Pennsylvania had chartered from McAllister, the owner. In his complaint he charged both with negligence in the conduct, operation and maintenance of the barge. At the close of the entire case the complaint was dismissed upon the merits as to the defendant McAllister. Thereafter and just before the case was submitted to the jury Pennsylvania agreed to settle with Ceci and now seeks to recover from the respondent the amount it paid to him.

The charter was the usual oral New York harbor barge charter. Pennsylvania as charterer had the use of the barge continuously for one year prior to the accident, which occurred on September 16, 1947. On that day the barge lay outboard another barge alongside the steamship S. S. Whittier Victory, adjacent to Pier 32, North River, New York City, having been dispatched there by Pennsylvania with a cargo destined for the steamship. Ceci, a longshoreman employed by Moore-McCormack Lines, Inc., was engaged with other longshoremen in removing cargo from the barges to the ship. As the last of the cargo on the Mormac No. 1, the barge inboard to the McAllister No. 108, was loaded on the ship, Ceci was instructed by his foreman to board the No. 108 preparatory to unloading her cargo. As he stepped from the inside barge over the rail and onto the deck of the McAllister No. 108, his foot was caught in or went through a hole on the deck of the No. 108, as a result of which he sustained severe injuries. The state court action by Ceci already alluded to was brought to recover resultant damages.

At the threshold of inquiry it is desirable to emphasize that we are not here concerned with any claim by Ceci against McAllister. Ceci's claim for his injuries may have been exclusively limited to Pennsylvania as the charterer of the barge; but the fact that McAllister as owner may not have been liable to Ceci as a third party for any unseaworthiness or any unsafe condition on the barge arising after the charter does not resolve the issue here presented.² Our inquiry is directed to the issue of indemnity, as between Pennsylvania as charterer and McAllister as owner, which is predicated upon claimed breach of duty under the charter by the latter.³

McAllister's basic contention in resisting Pennsylvania's claim is that the charter was a "demise"; that Pennsylvania was the owner "pro hac vice" and as such was in the exclusive possession and control of the barge at the time of the accident. Accordingly it urges that it was without duty or liability either to Ceci or Pennsylvania. McAllister also urges that Ceci failed to establish any negligence warranting a recovery against Pennsylvania; and that even if he did, the settlement of the action precludes a recovery by way of indemnity, and finally that the dismissal of the state court complaint as against it upon the merits is res judicata.

Thus these are the issues to be determined: (1) was Pennsylvania liable to Ceci upon the law and the facts as adduced in the state court action; (2) if so, is Pennsylvania entitled to recover from McAllister as indemnity the amount it paid to Ceci in settlement of its liability; (3) is the dismissal of the state court action as against McAllister, a co-defendant, res judicata so as to bar recovery; (4) does the fact that Pennsylvania settled Ceci's claim against it rather than to await a determination by a jury or a court constitute it a volunteer so as to preclude recovery.

1. Ceci's State Court Action

Since McAllister contends that Ceci failed to sustain his burden of proof against Pennsylvania it is necessary first to resolve that issue.⁴ Ceci as a longshoreman employed by an independent concern engaged in removing cargo from the McAllister No. 108, was an invitee or business guest aboard the barge. Pennsylvania was under a duty to provide him as such invitee with a reasonably safe place to work.⁵ It was also under a non-delegable duty to provide him with a seaworthy vessel.⁶ But Ceci confined his claim to negligence.

Pennsylvania concedes its legal duty to Ceci. Further Pennsylvania insists that the evidence against it was such as to indicate its liability for breach of its duty to him and that a verdict against it was not only reasonably likely but almost inevitable.

Upon the instant trial the entire record of the state court action was received in evidence; in addition each party offered specific portions in support of its respective case. After a careful examination of the state court trial minutes I am persuaded Ceci more than sustained his burden of proof upon the entire case. The record abundantly establishes that as Ceci stepped onto the McAllister No. 108 his right foot went through a rotted, water soaked and deteriorated area of the deck, about 5 to 6 inches wide and 8 to 10 inches in length, as a result of which he sustained his injuries; that this condition existed for a sufficient time prior to the accident to charge notice. While McAllister makes some contention that the accident occurred, if at all, on the sheathing covering the deck, about 18 inches from the rail, rather than on the deck proper about 3 to 6 inches from the rail where Ceci and his witnesses claimed it occurred, I do not see that this makes any real difference so far as the failure of Pennsylvania to supply Ceci with a reasonably safe place to work is concerned. The evidence, in my view, was overwhelming that the entire area at or about where Ceci met his injuries had reached such a state of decay and disrepair that it constituted an unsafe and dangerous area. Ceci's version was fully corroborated by other witnesses and no substantial evidence in contradiction was offered. Accordingly I conclude that Ceci established that the deck had been permitted to remain decayed and rotted over a considerable time prior to the accident; further that he was free from contributory negligence since he could not see the hole as he stepped onto the No. 108 from the height of the rail of the Mormac No. 1.

2. The Instant Suit by Pennsylvania Against McAllister

We next consider whether McAllister as owner of the barge is required to indemnify Pennsylvania for the amount paid to Ceci. McAllister seeks to avert a judgment against it by labeling the charter as a "demise". But this begins rather than ends inquiry since in each case the true construction of the charter must be governed by its own special facts.⁷

The parties appear to be in accord that the charter was the "usual oral New York harbor barge charter". McAllister concedes, as indeed it must, that under the oral charter there was an implied warranty that the barge was seaworthy at the time of its delivery to the charterer; but it contends that the warranty does not extend beyond delivery and that it is insulated from any liability to the charterer for any condition of unseaworthiness arising thereafter.

Essentially the issue is to be determined by the contractual arrangement of the parties and their conduct in its performance.⁸ Campion, the manager of McAllister's lighterage department, was the person through whom Pennsylvania, by telephone call, hired the barge. The hiring was at an agreed daily rate for an indefinite period, terminable at will. McAllister also supplied a captain and paid his straight time hours of service.⁹ The rate of hire, in addition to the use of the boat and the services of the captain, also included equipment, the lines and the pumps. Campion testified that Pennsylvania was to return the barge at the end of the charter period generally in the same good order and condition except for ordinary wear and tear, which was for the account of the owner and not for the account of the charterer. The evidence also establishes that for ordinary maintenance of the boat the captain was required to call McAllister which would put the work in hand as necessary; also, that the barge captain was under a duty to report any dangerous condition to McAllister as owner. Significantly, the captain referred all damage reports to McAllister and not to Pennsylvania, although reports pertaining to movements, cargo, time of arrival and departure of the vessel were submitted to Pennsylvania. A representative of the McAllister organization from time to time inspected chartered barges as well as those which it operated to check the condition of the boat, whether it was "obviously in need of repairs", and also the captain's performance of his duties. The evidence also establishes during the course of dealings between the parties, McAllister always made repairs to boats it chartered to Pennsylvania and that Pennsylvania never did. Thus the owner continued to have and to exercise many duties with respect to the barge which negatives the concept that the charterer had "exclusive possession and control" of it.

The barge captain remained the owner's representative and agent so far as the care of the barge and its internal economy were concerned, notwithstanding the charter was a demise of the barge.¹⁰ His duties were to tend to the barge and see that it was "kept seaworthy" and whether she...