Southern Cross Steamship Co. v. Firipis

• Decision Date: 28 December 1960
• Docket Number: No. 8099.,8099.
• Citation: 285 F.2d 651
• Parties: SOUTHERN CROSS STEAMSHIP CO., Inc., Appellant, v. Georgios FIRIPIS, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

285 F.2d 651 (1960)

SOUTHERN CROSS STEAMSHIP CO., Inc., Appellant, v. Georgios FIRIPIS, Appellee.

No. 8099.

United States Court of Appeals Fourth Circuit.

Argued September 27, 1960.

Decided December 28, 1960.

Walter B. Martin, Jr., Norfolk, Va. (Vandeventer, Black, Meredith & Martin, Norfolk, Va., on the brief), for appellant.

Sidney H. Kelsey, Norfolk, Va., for appellee.

Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH, Circuit Judges.

SOBELOFF, Chief Judge.

Important questions concerning the applicability of the Jones Act, 46 U.S. C.A. § 688, and liability for double wages under 46 U.S.C.A. § 596, are presented in this appeal by a shipowner from a decree in favor of a seaman for earned wages, double wages, maintenance, and damages for personal injuries resulting from negligence.

George Firipis, an able bodied seaman, was injured on April 1, 1958, while on board the Steamship Margaritis which was then in drydock in Norfolk, Virginia. In April, 1957, Firipis had signed an employment contract in Greece to serve upon the Margaritis for one year and joined the vessel in Alexandria, Egypt. On March 13, 1958, the ship left Bremen, Germany, bound for the United States and arrived in Norfolk on April 1, when it immediately went into drydock. Later that day, Firipis was assisting in moving an oxygen cylinder when he fell and injured his hand. He testified, and the District Court so found, that he slipped on oil on the deck. He was then discharged from the ship and taken immediately to the United States Public Health Service Hospital at Norfolk, where he remained until May 15, 1958. The day after his injury, on April 2, 1958, he was paid his wages for the period from March 13, 1958, to April 1, 1958, and signed a receipt for these.

On April 14, 1958, Firipis filed a libel against the ship and against her owner, Southern Cross Steamship Company, Inc., in the United States District Court for the Eastern District of Virginia, claiming damages for personal injuries under the Jones Act, maintenance, wages and double wages for waiting time.

On February 8, 1960, the District Court rendered judgment in favor of the libellant, Firipis, 181 F.Supp. 48. The court held that the Jones Act was applicable and that under the circumstances of the case, the presence of oil constituted negligence, entitling the libellant to $3500 damages diminished by fifteen per cent for contributory negligence. The court also found that wages were not paid for a period of time prior to March 13, 1958, and awarded Firipis such wages plus the statutory double wages for non-payment without sufficient cause. Additionally, the court granted Firipis $754.79 for unpaid maintenance. On this appeal, the shipowner contests everything except the award for maintenance.

I. Applicability of the Jones Act.

The Margaritis, an American built liberty ship, flew the flag of the Republic of Honduras and the articles executed by the libellant were Hondurian, stating that in the case of accident, Hondurian law should be applied. The shipowner insists that the law of the flag, which was proven below,¹ should control, and therefore the District Court committed error in holding the Jones Act applicable.

The leading case dealing with the applicability of the Jones Act where there are contacts with more than one nation is Lauritzen v. Larsen, 1953, 345 U.S. 571, 73 S.Ct. 921, 97 L.Ed. 1254. There, the Supreme Court discussed seven factors to be considered in determining the proper choice of law: (1) the place of the wrongful act, (2) the law of the flag, (3) the allegiance or domicile of the injured seaman, (4) the allegiance of the shipowner, (5) the place of contract, (6) inaccessibility of a foreign forum, (7) the law of the forum. It is clear from the Court's opinion that very little weight is to be given the last three, and we will not discuss them further except to note that the articles covering the trip from Bremen to Norfolk were signed on the high seas and validated in New York, and that there is no problem about the accessibility of a foreign forum, as the libellant could have his claim adjudicated by the Hondurian Consul in Norfolk.

Among the various factors set forth in Lauritzen, the most important is the law of the flag. It was there said that "the weight given to the ensign overbears most other connecting events in determining applicable law." 345 U.S. at page 585, 73 S.Ct. at page 930. See also Romero v. International Terminal Co., 1959, 358 U.S. 354, 381 et seq., 79 S.Ct. 468, 3 L.Ed.2d 368. However, if the law of the flag is to control, the flag must not be one of convenience merely but bona fide. Justice Jackson pointed out in Lauritzen, 345 U.S. at page 587, 73 S.Ct. at page 931:

"But it is common knowledge that in recent years a practice has grown, particularly among American shipowners, to avoid stringent shipping laws by seeking foreign registration eagerly offered by some countries. Confronted with such operations, our courts on occasion have pressed beyond the formalities of more or less nominal foreign registration to enforce against American shipowners the obligations which our law places upon them."

Many cases, both before and after Lauritzen, have refused to enforce such nominal foreign registration by disregarding flags of convenience. Gerradin v. United Fruit Co., 2 Cir., 1932, 60 F.2d 927; Carroll v. United States, 2 Cir., 1943, 133 F.2d 690; Bartholomew v. Universe Tankships, Inc., 2 Cir., 1959, 263 F.2d 437; Zielinski v. Empresa Hondurena De Vapores, D.C.S.D.N.Y.1953, 113 F.Supp. 93.² Turning to the present case, the only contacts the Margaritis had with Honduras were the flag and articles. The ship was owned by a Liberian corporation, all of whose stock was owned by Greek and American citizens. The orders directing the movements of the vessel came partly from the American and partly from the Greek owners. The members of the crew were residents of Greece, except for two residents of the United States. The injury occurred in an American port. In fact, the vessel had never, in any of its voyages, visited a Hondurian port. We cannot, confronted with such an absence of any significant contacts with Honduras, uphold the shipowner's contention that Hondurian law should have been applied. The flag was nothing more than illusory.

One further facet of this problem merits discussion. The record in this case reveals that the significant contacts were with two countries, the United States and Greece. However, neither side, either in the District Court or in this court, suggested that Greek law should have been applied, or introduced below any evidence of what the Greek law was. Under such circumstances, the question arises whether this court should on its own initiative examine the record to determine if sufficient contacts with the United States existed to permit a Jones Act suit, or whether, in the alternative, the case should be remanded for proof and application of Greek law.³ However, we do not have to decide whether it would be appropriate for this court to remand for the application of a country's law neither contended for nor proven, for we conclude that the District Court was not clearly in error in holding that the contacts with the United States were substantial enough to warrant applying the Jones Act.

The only evidence offered by the ship-owner relevant to the applicability of the Jones Act consisted of answers to certain interrogatories propounded by the libellant and the testimony of Riley M. Gregory, a partner in Hasler & Company, the shipowner's Norfolk agent. In the interrogatories, the shipowner, Southern Cross Steamship Company, was asked to state the names, addresses and citizenship of all stockholders or persons holding an interest in the company. The shipowner answered that at the time of the injury, 20% of the corporate stock was owned by an American, Mr. Stephen Perry, residing in New York, and 80% of the stock was owned by Greek citizens. Although the answers gave the name and address of the American owner, the names and addresses of the Greek owners were not given even though expressly asked for. In response to a question about who gave the operating instructions for the Margaritis, the shipowner stated that such orders were given by both the Greek owners and the American owner. The shipowner was also asked to list the voyages of the Margaritis for a period of two years prior to the injury. The answer listed thirteen voyages of which nine were either to or from United States ports. None of the voyages listed were to or from Greek, Liberian, or Hondurian ports. The answers to the interrogatories were signed in New York by the President of Southern Cross Steamship Company, Stamatios Perivolaris, presumably one of the Greek owners. This fact, plus the refusal to give the names and addresses of the Greek owners, lends some support to the libellant's contention that some, at least, of the Greek owners were actually residents of the United States and that the ship was really controlled from New York.

The evidence given by Mr. Gregory, a partner in the firm acting as the shipowner's Norfolk agent, was the only other evidence offered by the shipowner on this question. Mr. Gregory's testimony supports the view that the vessel was controlled from New York. He testified that, as far as he knew, the Southern Cross Steamship Company was a New York corporation located at No. 1 Broadway in New York City. He was asked what was the connection between Southern Cross and the Eastern Steamship Agency, Inc., located at the same address, and he replied that he did not know. It is asserted by the shipowner that Eastern Steamship was just the general agent of Southern Cross. However, Gregory testified further that as far as Hasler & Company was concerned, Eastern Steamship Agency controlled the vessel and directed its operations Eastern Steamship Agency had reimbursed the Norfolk agent for all of the bills in connection...