States Marine Corp. of Delaware v. Victory Carriers, Inc.

• Decision Date: 17 December 1959
• Docket Number: No. 16104.,16104.
• Citation: 272 F.2d 463
• Parties: STATES MARINE CORPORATION OF DELAWARE, a Corporation, Appellant, v. VICTORY CARRIERS, INC., a Corporation, and Shipowners & Merchants Towboat Co., Ltd., a Corporation, Claimant of THE Tug, SEA SCOUT, Appellees. SHIPOWNERS & MERCHANTS TOWBOAT CO., Ltd., Appellant, v. VICTORY CARRIERS, INC., a Corporation, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

272 F.2d 463 (1959)

STATES MARINE CORPORATION OF DELAWARE, a Corporation, Appellant, v. VICTORY CARRIERS, INC., a Corporation, and Shipowners & Merchants Towboat Co., Ltd., a Corporation, Claimant of THE Tug, SEA SCOUT, Appellees.

SHIPOWNERS & MERCHANTS TOWBOAT CO., Ltd., Appellant, v. VICTORY CARRIERS, INC., a Corporation, Appellee.

No. 16104.

United States Court of Appeals Ninth Circuit.

October 22, 1959.

Rehearing Denied December 17, 1959.

Graham, James & Rolph, Francis L. Tetreault, San Francisco, Cal., for States Marine Corp.

Derby, Cook, Quinby & Tweedt, James A. Quinby, San Francisco, Cal., for Shipowners & Merchants.

McCutchen, Doyle, Brown & Enersen, Russell A. Mackey, Norman B. Richards, San Francisco, Cal., for appellees.

Before MATHEWS, POPE and JERTBERG, Circuit Judges.

POPE, Circuit Judge.

Victory Carriers, Inc., owner of the vessel Lewis Emery, Jr., filed a libel against the tug, Sea Scout, and the latter's owner and operator, Shipowners and Merchants Towboat Co., Ltd., claiming collision damages caused by the alleged fault of the Sea Scout and the employees of the Towboat Co., including the tug master who served as pilot on the trip.

The tug owners, commonly known as Red Stack, (and so called herein), impleaded the appellant States Marine Corporation of Delaware, to whom the Lewis Emery Jr. was time-chartered at the time of the collision, praying indemnity from States Marine for any sums Red Stack might be required to pay libelant. The decision of the trial court was that the collision was caused by the combined negligence of the pilot on the vessel (here called the Emery),¹ and of the operator of the tug. This finding is not contested. The court further decided that States Marine, in ordering the towage service furnished by Red Stack, had expressly warranted its authority to bind Victory Carriers to a pilotage clause, made a part of the order, under which Red Stack would have been free from liability to Victory Carriers for collision damage resulting from pilot negligence. Holding that Victory Carriers had not been so bound, and hence that Red Stack must respond to Victory Carriers not merely for one half but for all of the damages to the vessel, the court decided that States Marine was liable upon its warranty to Red Stack for one half the damages. States Marine has appealed.

In the first of its two principal contentions here, States Marine argues that under the terms of its time charter Victory Carriers was precluded from exacting damages from Red Stack for injuries to its vessel from pilot negligence. This was a standard form of charter. Appellant's argument points to two clauses. One was Clause 2, which stated that the charterers "shall provide and pay for * * * Port charges, Pilotage, Agencies. * * *" At the time of the collision States Marine, under this clause, had arranged for Red Stack to move the Emery from Pier 92, San Francisco, to Oakland, and the master of the tug, Sea Scout, was on board the vessel; while the operators of the tugboat were the mate and other employees of Red Stack.

The second charter clause noted is Clause 26, which recited: "Nothing herein stated is to be construed as a demise of the vessel to the Time Charterers. The owners to remain responsible for the navigation of the vessel, insurance, crew, and all other matters, same as when trading for their own account." Says States Marine: In ordering the undocking service States Marine was doing only that which was authorized and required of it by Clause 2; but the loss was a loss in navigation, and of a type which Victory Carriers expressly agreed it would bear alone when it agreed to "remain responsible for the navigation of the vessel * * * same as when trading for their own account." This provision, it is claimed, protected Red Stack from liability for injury resulting from the pilot's negligence.

Victory Carriers' answer to this is that whatever may be the effect of that provision of the charter as between the parties thereto, it cannot operate to exonerate or render not liable Red Stack, which, says appellee, was an independent contractor which had taken over the navigation of the ship, and its duty to pilot carefully was not affected by an agreement to which it was not a party; that the clause mentioned cannot be construed to have been impliedly, or otherwise, for the benefit of Red Stack.

It is our view that this position of Victory Carriers is a correct one. The same question was presented in The West Eldara, 2 Cir., 104 F.2d 670, 671, certiorari denied McAllister Towing & Transp. Co. v. American D. Lines, 308 U.S. 607, 60 S.Ct. 144, 84 L.Ed. 507, where the court said: "Under this time charter which was not a demise, it is clear that the navigation of the vessel was the responsibility of the owner rather than that of the charterer. As between those two the acts or omissions of the tug boat captain while in charge of the vessel would be the acts or omissions of the owner even though he had been put in control by the charterer by virtue of its right to do so in accordance with the terms of clause 2 of the charter. * * *

"The error in the former opinion which led to an erroneous result lay in the extension of the above principle beyond the owner-charterer relationship so as to control in respect to liability as between the owner and third persons. Bramble v. Culmer, 4 Cir., 78 F. 497, on which special reliance was placed, did not go so far nor did the other cases cited.

"On the contrary, in the absence of any special contract provisions like those in the pilotage clause which are not here binding upon the owner, one who is under contract to dock or undock a vessel is responsible as principal to the owner of the ship for the negligence of the agent whom the contractor places on the ship in charge of the operation."²

We agree with what is there stated. In Robert C. Herd & Co. v. Krawill Machinery Corp., 1959, 359 U.S. 297, 79 S.Ct. 766, 3 L.Ed.2d 820, it was held that a provision of the shipowner's bill of lading which limited its liability to $500 per package, but which did not refer to the stevedoring contractor (which dropped a crated machine into the harbor while attempting to load it on ship), was not designed for the benefit of any one except the shipowner and did not operate to limit the liability of the negligent stevedoring contractor to the cargo owner.

That decision disposes of a substantial portion of the argument presented by appellant in support of its claim that Clause 26 not only relieves the charterer of responsibility for navigation of the vessel, but operates to extend that immunity to the subcontractor or agent to whom a portion of the performance has been delegated. The meaning of the Herd case is that no such conclusion can be drawn from facts such as those here. 359 U.S. at page 303, 79 S.Ct. at page 770.³

Appellant relies strongly on the case of Elder, Dempster & Co. Ltd. v. Paterson, Aochonis & Co., Ltd., 1924 A.C. 522. The Herd case, 359 U.S. at page 307, 79 S.Ct. at page 772, considered a similar contention as to that case, and held that this question "was not involved in or decided by that case."⁴

It is contended that notwithstanding its decision in the Herd case, the Supreme Court would hold that the language here involved: "The owners to remain responsible for the navigation * * * same as when trading for their own account," protects the towboat company. As we understand appellant's argument on this point, it is that this provision was inserted to immunize States Marine; that now to hold that Red Stack is liable for pilot negligence, and then permit recovery over, as in this case, against States Marine, frustrates the primary purpose of Clause 26. Says appellant: "Not only the wording of the time charter itself but the very existence of the present litigation make clear that the contractual undertaking of the shipowner, Victory Carriers, to remain responsible for navigation must extend not only to States Marine but to Red Stack to assure States Marine itself of the benefit of such provision."

A similar argument was rejected in Brady v. Roosevelt S.S. Co., 317 U.S. 575, 582, 63 S.Ct. 425, 87 L.Ed. 471. This argument of appellant assumes that the time charter, when drawn, contemplated and had in view an indemnity-warranty agreement such as that here enforced against States Marine. That assumption is not warranted. The parties are not shown to have anticipated Red Stack's special warranty requirement, or that they even anticipated dealing with Red Stack, or entering its port.

A like point was made in the Herd case when it was in the Court of Appeals. That court said, 256 F.2d at pages 950, 951: "The extent of the latter's liability was apparently not in contemplation in the drafting of the statute, or the bill of lading to which it was not a party. * * If there were a contrary intent, nothing would have been easier than to say in the statute or in the bill of lading that the limitation applies to the ship, its owners, and loading agents." So here, if Red Stack's required warranty had been in contemplation when the charter was executed, nothing would have been easier than to say in it that the charterer's immunity from responsibility for navigation applies to the charterer and any towage or pilotage company whom the charterer might engage pursuant to Clause 2.

Since nothing in the charter, or in the relationships or situations of the parties generally bars the owner from recovery from the tug company, the ordinary rule must be applied, namely, that the tug company is liable to the vessel owner for the negligence of the pilot who was in the employ of the tug company. Sturgis v. Boyer, 24 How. 110, 122, 123, 16 L.Ed. 591; Robins Dry Dock & Repair Co. v. Navigazione L. Triestina, 261 N.Y. 455, 185 N.E. 698.

States Marine next contends that the trial court should have held that the owner of the Emery was actually bound by a pilotage clause which was prepared by Red...