The Hoffmans

• Decision Date: 24 May 1909
• Citation: 171 F. 455
• Parties: THE HOFFMANS.
• Court: U.S. District Court — Southern District of New York

171 F. 455

THE HOFFMANS.

United States District Court, S.D. New York.

May 24, 1909

Syllabus by the Judge

A loss to the owner of certain twine was suffered through fire on one of the railroad company's barges, and upon an action being brought against the railroad to recover the damages the latter instituted proceedings to limit its liability to the value of the barge. The owner of the twine excepted to the petition. The questions involved were: (1) Was a single claim sufficient to give the court jurisdiction? (2) Did the petitioner's bill of lading, providing that water carriage should be subject to certain conditions, operate to prevent the application of the limitation of liability acts? (3) Was the libellant precluded by a stipulation, providing that the agreement might be used in a New York state court from resorting to this court? and (4) Did the Hepburn act (Act Feb. 4, 1887, c. 104, 24 Stat. 379 (U.S. Comp. St. 1901 p. 3154)), repeal the provisions of sections 4284-4289, Rev St. U.S. (U.S. Comp. St. 1901, pp. 2943, 2942), relating to limitation of liability. The first question answered in the affirmative and the others in the negative.

Wallace, Butler & Brown, for petitioner.

Cravath, Henderson & De Gersdorf, for exceptant, appearing specially to object to the jurisdiction of the court.

ADAMS District Judge.

This is a petition on the part of the New York Central & Hudson River Railroad Company, as owner of the barge Hoffmans, to limit its liability to the value of the barge and freight, ascertained to have been, directly after the disaster, $4,988.22, with respect to a loss by fire in September, 1907, on 3,500 bales of twine, belonging to the International Harvester Company, and shipped by it on the railroad at Auburn, New York, on the 12th of September, 1907, to New York, for export. The value of the shipment was $14,505.37, but it was not all burned and the salvage having been deducted, there remained a sum of $12,286.57, which represented the loss on the twine by reason of the fire and the Harvester Company now seeks to recover that sum from the petitioner. The loss was therefore considerably in excess of the value of the carrying barge, hence this proceeding.

The Harvester Company having originally excepted to the jurisdiction of the court, the exceptions were overruled on the 12th day of November, 1908, but without prejudice to a renewal of the same and they are again presented as follows:

'First: That the shipment in question is governed by the Interstate Commerce Act to the exclusion of the statutes for limitation of liability named in said petition of New York Central & Hudson River Railroad Company, and this court has therefore no jurisdiction of said petition for limitation of liability.

Second: That in addition to the exclusion of the statutes for limitation of liability by the Interstate Commerce Acts any rights which New York Central & Hudson River Railroad Company might have had under said statutes for limitation of liability were waived and excluded by the contract of shipment, and this court has therefore no jurisdiction of said petition for limitation of liability.

Third: That this cause was already in process of adjudication in a proper State Court; that there was and is no other claimant against New York Central & Hudson River Railroad Company on account of said loss or damage to said lighter; that the State Court was and is competent to give all proper relief, and that this court has therefore no jurisdiction of the matters contained in said petition of New York Central & Hudson River Railroad Company.'

In the arguments, however, the parties have proceeded upon somewhat different lines, the Harvester Company covering the grounds of the exceptions, as follows:

'First. That inasmuch as it sufficiently appears before this Court that there is only one claimant in regard to the damage to this barge or its cargo, to wit, the Harvester Company, and the controversy between that claimant and the petitioner, the Railroad Company, had been actually commenced in a court of competent jurisdiction to determine the same, before the filing of this petition, therefore, under the doctrine enunciated in The Rosa (D.C.) 53 F. 132, this Court should dismiss the petition for limitation of liability.

Second. That the Railroad Company, by its contract of carriage, to wit, the bills of lading, has waived its right to take advantage of any claim for limitation of liability.

Third. That the Railroad Company, by its stipulation, has likewise waived its right to take advantage of the jurisdiction of this Court; and

Fourth. That the statutes of limitation of liability are not operative to destroy the rights existing between shippers and carriers created by the socalled Hepburn Act and the statutes governing the conduct of interstate carriers.'

1. For a considerable length of time this court entertained the view that where there was but a single claim, the court was without jurisdiction to decree a limitation of liability under Rev. St. U.S. Secs. 4284 and 4285 (U.S. Comp. St. 1901, pp. 2943, 2944). The Rosa (D.C.) 53 F. 132; The Eureka No. 32 (D.C.) 108 F. 672.

Views opposing Judge Brown, however, have been indicated. Judge Thomas in The M. Moran (D.C.) 107 F. 526, in quoting from The Rosa, said the expression there used by Judge Brown was not suited to the case then under consideration but:

'If the facts were similar to those presented in The Rosa, the views of the court in that case would not be easily disregarded, notwithstanding contrary holding by the United States Circuit Court of Appeals for the First Circuit in Quinlan v. Pew, 5 C.C.A. 438-446, 56 F. 111-120.'

Later, in the Eastern district, In re Starin (D.C.) 124 F. 101, Judge Thomas held that a shipowner, by defending and appealing an action in a state court to recover damages for injury to a passenger does not waive his right to petition a court of admiralty for limitation of liability, nor is he debarred from the right to invoke the remedy because there is but a single claimant.

In 1907, Judge Brawley in The Lotta (D.C.) 150 F. 219, discussed the question quite thoroughly and followed Judge Brown in The Rosa and The Eureka.

Contrary views have been expressed in Quinlan v. Pew (Circuit Court of Appeals, First Circuit) 56 F. 111, 5 C.C.A. 438, and by Judge McPherson of Pennsylvania in The S. A. McCaulley (D.C.) 99 F. 302.

The law of the question was very fully discussed in Quinlan v. Pew, 56 F. 120, 121, 5 C.C.A. 446, and I consider the reasoning there and the result reached much more consonant with sound maritime principles than the contrary ones expressed. It was there said by Judge Putnam:

'The appellant also objects that it appears from the proceedings that the claim of Quinlan is the only outstanding one against the vessel, or owners as owners, and that this fact brings the case within The Rosa, 53 F. 132, where it was held that the statute limiting liability does not apply under such circumstances. As already said, the state of the record is as claimed by the appellant; yet this court cannot accept the rules laid down in The Rosa. The statute right to surrender the vessel to a trustee appointed by any court of competent jurisdiction, which in maritime matters necessarily includes the admiralty courts, and to be thus relieved from liability, is protected both by the letter of the statute and by its reason, whether there are numerous claims outstanding or but one; and the right to have the vessel appraised under admiralty rule 54 is necessarily coextensive with the right to surrender.

Indeed, under admiralty rule 56, the owners may bring the entire contest into the admiralty court, even though they finally establish a contention that there are no valid claims whatever. The rule in The Rosa is quite impracticable, as it is frequently impossible for the owners of vessels navigating foreign seas, remote from their personal control, to be assured as to the extent to which they may be subject to liens and claims of various kinds. The original act of 1851 Sec. 4, uses both the plural and singular; and there is no such change found in the Revised Statutes as would justify the court in holding that Congress intended any substantial innovation. Indeed the Revised Statutes (section 4285) use both the plural 'claimants,' and the singular, 'person,' thus bringing forward the plural and singular of the original act. The statute was intended for the encouragement of commerce, and would not receive its full effect to the extent given by the Supreme Court in Providence & New York Steamship Co. v. Hill Manuf'g Co., 109 U.S. 578, 588, 589, 3 Sup.Ct. 379, 617, if the owners of a vessel or wreck, under the circumstance of there being but a single claim outstanding, large enough to absorb the entire vessel or her salvage, could be compelled, on the verdict of a jury, to pay perhaps vastly more than her real value, or be forced to the trouble and expense of litigating any issue of that character. The appellant treats the jurisdiction to be exercised under the statute as though governed exclusively by the principles applicable to courts of equity. But with these neither the statute nor the proceedings under it, so far as concerns the admiralty courts, have any relation, except merely incidentally, whenever it happens that the claims are in excess of the value of the vessel or her salvage. In that event the rules of equity procedure come in, not for the purpose of determining the jurisdiction of the court, but only as they relate to proceedings in bankruptcy, or any other proceedings, when marshaling of assets becomes incidentally necessary.'

The ruling in the last mentioned case has recently been quite generally followed in this...