Petition of Lake Tankers Corporation

• Decision Date: 14 July 1955
• Citation: 132 F. Supp. 504
• Parties: Petition of LAKE TANKERS CORPORATION, for exoneration from or limitation of liability.
• Court: U.S. District Court — Southern District of New York

132 F. Supp. 504

Petition of LAKE TANKERS CORPORATION, for exoneration from or limitation of liability.

United States District Court S. D. New York.

July 14, 1955.

Burlingham, Hupper & Kennedy, New York City, proctors for petitioner, Eugene Underwood and H. Barton Williams, New York City, of counsel.

Rosen & Rosen, Poughkeepsie, N. Y., proctors for claimant Lillian M. Henn, appearing specially, Paul Rosen, Poughkeepsie, N. Y., and Frank C. Mason, New York City, of counsel.

WEINFELD, District Judge.

The claimant moves to modify the restraining order entered in the limitation proceeding so as to permit her to proceed with a suit against petitioner in the New York State Supreme Court commenced in her capacity as Administratrix of the estate of her late husband.

The claim arises out of a collision in the Hudson River between the motor yacht Blackstone, on which deceased was a passenger, and the tank barge LTC No. 38 then in tow of the tug Eastern Cities. The tug and the barge are owned by the petitioner. The Eastern Cities was push-towing No. 38 up the Hudson River and the yacht was proceeding downstream when the collision occurred. The yacht sank and deceased was drowned. The other passengers aboard the yacht and its owner have also filed claims against the petitioner.

In all there are eleven claimants and their claims aggregate $259,525. The total of two bonds filed in the limitation proceeding is $283,542.21. Accordingly, the claimant-Administratrix, in reliance upon Petition of Texas Co., 2 Cir., 213 F.2d 479, and other authorities¹ seeks to lift the restraint.

The petitioner contends that Petition of Texas Co., supra, is inapplicable; that in fact the limitation funds do not exceed the aggregate of all claims filed against it. It urges that in the instant proceeding there is not a single limitation fund of $283,542.21 but on the contrary two separate funds, one for the Eastern Cities in the sum of $118,542.21 and the other for the LTC No. 38 in the amount of $165,000, and that pending a final determination of liability on the part of each vessel, each fund must be treated separately and so treated clearly the eleven claims exceed each fund and so must be brought into concourse.

The facts which led up to the filing of the separate ad interim stipulations are as follows: In September, 1954 claimant as Administratrix commenced her action in the State Supreme Court, Ulster County, to recover damages for the wrongful death of decedent. The complaint charged that the Lake Tankers Corporation as owner of both the barge and tug, was negligent and contributed to the death of decedent. The owner of the yacht Blackstone was also named as a defendant in the action and charged with negligence in its operation.

Thereafter the petitioner filed the limitation proceeding as owner of both the tug and barge but gave an ad interim stipulation only for the value of its interest in the tug Eastern Cities and pending freight in the sum of $118,542.21. The usual restraining order issued but was not limited to the tug Eastern Cities. The restraint also enjoined prosecution of claimant's state court action against petitioner with respect to the barge as well. The petition alleged that the barge was without motive power; that both vessels were seaworthy; that both were exhibiting regulation lights. The claimant in filing exceptions to the petition disputed these allegations and contended, amongst other matters, that one of the issues to be determined upon a trial was the lack of navigation lights upon the barge.

She then moved to dismiss the petition on the ground that although petitioner sought exoneration from, or in the alternative limitation of, liability, it had failed as owner of the barge to offer an ad interim stipulation for its interest in the barge and her pending freight and had failed to surrender or offer to surrender the vessels as required by the statute. Judge Ryan sustained the exception to the extent of providing that in the event the petitioner filed a bond for the value of the barge the restraining order would remain in force; and failing which the restraint would be modified so as to continue in effect only with respect to suits against the tug Eastern Cities.

The petitioner then filed a second bond in the sum of $165,000 representing the value of its interest in the barge, which led to the filing of the present motion.

The basis of claimant's contention that both bonds must be totalled is that when two or more vessels of the same owner contribute to a disaster the owner may not limit liability without surrendering his interest in all vessels.² While this is so, and the bond to cover the barge was ordered by Judge Ryan to meet this contingency, vessels in single ownership engaged in a common enterprise, absent a claim based on a contractual relationship,³ may not be treated as a unit until it is determined whether each is personally at fault, in rem. Up to that time each must be...