Standard Oil Co of New Jersey v. Southern Pac Co

• Decision Date: 20 April 1925
• Docket Number: No. 197,197
• Citation: 69 L.Ed. 890,45 S.Ct. 465,1925 AMC 779,268 U.S. 146
• Parties: STANDARD OIL CO. OF NEW JERSEY v. SOUTHERN PAC. CO. et al
• Court: U.S. Supreme Court

268 U.S. 146

45 S.Ct. 465

69 L.Ed. 890

STANDARD OIL CO. OF NEW JERSEY

v SOUTHERN PAC. CO. et al.

No. 197.

Argued Jan. 19, 20, 1925.

Decided April 20, 1925.

Messrs. John M. Woolsey and W. H. McGrann, both of New York City, for petitioner.

[Argument of Counsel from pages 147-151 intentionally omitted] Messrs. Charles C. Burlingham, Van Vechten Veeder and A. Howard Neely, all of New York City, for respondents.

Mr. Justice BUTLER delivered the opinion of the Court.

August 19, 1918, the steamship Cushing, owned by the petitioner, Standard Oil Company, and the Proteus, owned by the respondent Southern Pacific Company, and operated by the Director General of Railroads, collided. The Proteus and her cargo were lost. Petitioner and respondents filed their petitions for limitation of liability. R. S. §§ 4283-4285 (Comp. St. §§ 8021-8023); admiralty rule 54. The proceedings were consolidated. The District Court found that both vessels were at fault and referred the question of damages to a commissioner. The Cushing, 266 F. 570. He reported that there should be awarded on account of the loss of the Proteus $750,000, with interest. The report was confirmed and decree entered, November 28, 1922. Petition of Standard Oil Co. of New Jersey, 285 F. 617. Petitioner and Southern Pacific Company appealed; the Director General did not appeal. The petitioner maintained that the Cushing was not at fault, and sought reversal on that ground. The Southern Pacific Company contended that the commissioner's valuation of the Proteus was too low. The Circuit Court of Appeals affirmed the fault of the Cushing, and held that the value of the Proteus at the time of the collision was $1,225,000, and the decree of the District Court was modified accordingly. The Cushing, 292 F. 560. The petition to this court for a writ of certiorari alleges that at the time of the collision the Proteus was under the sole control of the Director General of Railroads, and that, if the vessel had not been lost, it would have continued in his control until March 1, 1920; that the claim of the Southern Pacific Company was against the Standard Oil Company and the Director General, who were joint tort-feasors causing the loss of the Proteus; and that, after the expiration of the term of the Circuit Court of Appeals, petitioner learned that a final settlement had been made between the Southern Pacific Company and the Director General, by which the liability of the latter for the loss of the Proteus was satisfied by payment of $750,000, or by adjustment and settlement on that basis. And the petition asserts that thereby any claim of the Southern Pacific Company against petitioner was extinguished, because a settlement with one joint tort-feasor precludes recovery from the other for the same loss. The petition was granted. 263 U. S. 696, 44 S. Ct. 133, 68 L. Ed. 511. Later the order granting the writ was vacated as to personal injury, cargo, and passenger claimants against whom no error was assigned. 263 U. S. 681, 44 S. Ct. 135, 68 L. Ed. 504. By leave of this court, additional testimony relating to the settlement was taken in accordance with paragraph 2 of rule 12. 265 U. S. 569, 44 S. Ct. 458, 68 L. Ed. 1184.

The material facts may be briefly stated. December 28, 1917, the President took over the combined rail and water transportation system of the Southern Pacific Company and its subsidiaries. February 19, 1919, the Director General and the owner made a contract in respect of the operation and upkeep of the properties and for the compensation to be paid for their use during federal control. By it the Director General was required to pay for property destroyed and not replaced. December 19, 1922, final settlement under the contract was made. The total amount of all items claimed by the company was $54,252,694.57. There was paid $9,250,000 as a lump sum, and that was accepted in full satisfaction of all claims, with certain exceptions not here material. The company claimed $1,268,090.26 for the Proteus and $16,663.80 for the lighter Confidence. The Railroad Administration kept a record, showing how the lump sum was arrived at. In this record there was allocated on account of the Proteus and the Confidence a lump sum of $885,000, but this was not in any wise communicated to the company. There was no agreement as to the value of the Proteus, or as to the amount included in the lump sum on account of her loss, or on account of any other item. On the facts disclosed, it is impossible to attribute to her loss any particular amount.

The rule of the common law that one who is injured by a joint tort and accepts satisfaction from one of the wrongdoers cannot recover from the other does not apply. By reason of the immunity of the United States from suit, the Southern Pacific Company did not have the same remedy against the Director General that an owner would have against a private charterer. Waiver of sovereign immunity from suit was not broad enough to permit an action in tort by the company against the Director General for the loss of the Proteus. See section 108 Federal Control Act, 40 Stat. 456, c. 25 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, § 3115 3/4 j); Dupont De Nemours & Co. v. Davis, 264 U. S. 456, 462, 44 S. Ct. 364, 68 L. Ed. 788; Missouri Pacific R. R. Co. v. Ault, 256 U. S. 554, 41 S. Ct. 593, 65 L. Ed. 1087. In respect of that, there was no breach of duty owed to the respondent by the Director General as a common carrier. As was said in The Western Maid, 257 U. S. 419, 433, 42 S. Ct. 159, 161 (66 L. Ed. 299):

'The United States has not consented to be sued for torts, and therefore it cannot be said that in a legal sense the United States has been guilty of a tort.'

At the time of the collision, the Director General was a special owner having exclusive possession and control of the vessel; the Southern Pacific Company was the owner of the reversion. Together they had full title, and joined in the petition for limitation of liability. Adjustment of their interests under the contract could be made before as well as after the end of litigation. No question of tort or negligence on the part of the Director General was involved. The settlement had no relation to the wrongful act of petitioner and did not affect its liability. Ridgeway v. Sayre Electric Co., 258 Pa. 400, 406, 102 A. 123, L. R. A. 1918A, 991, Ann. Cas. 1918D, 1. Petitioner is not entitled to dismissal as against the Southern Pacific Company. Nor is the Director General bound by the decree of the District Court as to the amount of damages. On appeal in admiralty, there is a trial de novo. The whole case was opened in the Circuit Court of Appeals by the appeal of the Southern Pacific Company, as much as it would have been if the Director General had also appealed. Reid v. American Express Co., 241 U. S. 544, 36 S. Ct. 712, 60 L. Ed. 1156; Watts, Watts & Co. v. Unione Austriaca, 248 U. S. 9, 21, 39 S. Ct. 1, 63 L. Ed. 100, 3 A. L. R. 323; The John Twohy, 255 U. S. 77, 41 S. Ct. 251, 65 L. Ed. 511; Munson S. S. Line v. Miramar S. S. Co., 167 F. 960, 93 C. C. A. 360. And see Irvine v. The Hesper, 122 U. S. 256, 266, 7 S. Ct. 1177, 30 L. Ed. 1175.

It is fundamental in the law of damages that the injured party is entitled to compensation for the loss sustained. Where property is destroyed by wrongful act, the owner is entitled to its money equivalent, and thereby to be put in as good position pecuniarily as if his property had not been destroyed. In case of total loss of a vessel, the measure of damages is its market value, if it has a market value, at the time of destruction. The Baltimore, 8 Wall. 377, 385, 19 L. Ed. 463. Where there is no market value, such as is established by contemporaneous sales of like property in the way of ordinary business, as in the case of merchandise bought and sold in the market, other evidence is resorted to. The value of the vessel lost properly may be taken to be the sum which, considering all the circumstances, probably could have been obtained for her on the date of the collision; that is, the sum that in all probability would result from fair negotiations between an owner willing to sell and a purchaser desiring to buy. Brooks-Scanlon Corporation v. United States, 265 U. S. 106, 123, 44 S. Ct. 471, 68 L. Ed. 934. And by numerous decisions of this court it is firmly established that the cost of reproduction as of the date of valuation constitutes evidence properly to be considered in the ascertainment of value. Southwestern Bell Telephone Co. v. Public Service Commission, 262 U. S. 276, 287, 43 S. Ct. 544, 67 L. Ed. 981, 31 A. L. R. 807, and cases cited; Bluefield Co. v. Public Service Commission, 262 U. S. 679, 689, 43 S. Ct. 675, 67 L. Ed. 1176; Georgia Ry. & Power Co. v. Railroad Commission, 262 U. S. 625, 629, 43 S. Ct. 680, 67 L. Ed. 1144; Brooks-Scanlon Corporation v. United States, supra, 125 (44 S. Ct. 471); Ohio Utilities Co. v. Public Utilities Commission (decided March 2, 1925) 267 U. S. 359, 45 S. Ct. 259, 69 L. Ed. ——. The same rule is...