THE LINSEED KING

• Decision Date: 17 December 1930
• Citation: 48 F.2d 311
• Parties: THE LINSEED KING. In re SPENCER KELLOGG & SONS, Inc.
• Court: U.S. District Court — Southern District of New York

48 F.2d 311 (1930)

THE LINSEED KING.

In re SPENCER KELLOGG & SONS, Inc.

District Court, S. D. New York.

December 17, 1930.

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Bigham, Englar, Jones & Houston, of New York City (D. Roger Englar, Charles W. Hagen, and George S. Brengle, all of New York City, of counsel), for petitioner.

Elizabeth Robinson and Lucien V. Axtell, both of New York City (Elizabeth Robinson, of New York City, of counsel), for claimants.

Lester Hand Jayne, of New York City, for claimants Roberts, Sims, McEachin, and Varouxaki.

Kurzman & Frank, of New York City, for claimant Ifill.

Marsh, Spencer & Marsh, of New York City, for claimant Navas.

Oeland & Kuhn, of New York City, for claimant Hicks.

PATTERSON, District Judge.

This is a limitation of liability proceeding under section 4283 of the Revised Statutes (46 USCA § 183). It comes before me on exceptions to a commissioner's report.

On December 20, 1926, the Linseed King sank in the Hudson River. Many lives were lost. The survivors managed in one way or another not to be drowned, but suffered from exposure. The Linseed King was a launch owned and operated by Spencer Kellogg & Sons, Inc., which had a manufacturing plant at Edgewater, N. J. Many of the men employed there came from New York City. The launch was used to carry them from a pier on the New York side to the place of work on the New Jersey side. At the time in question, the launch carried not only employees but also men who made the trip in the hope of securing work. No fares were charged, and the general public was not invited to ride. In short, the launch was a private carrier, operated by the employer for its own convenience and that of its employees. The facts as to this appalling disaster have already been fully set forth in an opinion by Judge Hazel, and need not be repeated. The Linseed King (D. C.) 24 F.(2d) 967. The prior steps in this proceeding are of importance, however, because of the bearing of the New Jersey Workmen's Compensation Act (P. L. 1911, p. 134, as amended), upon the rights of the parties.

The proceeding was initiated in March, 1927, by Spencer Kellogg & Sons, Inc., as owner of the launch. The petition, after setting forth the happening of the calamity, alleged that it was not due to any fault on the petitioner's part, and that many lawsuits for loss of life and personal injuries had been commenced, and that claims had been, or would be, filed with the New Jersey Workmen's Compensation Bureau. By reason of such facts, the petitioner stated that it sought the limitation of liability afforded by the Revised Statutes, and that it also desired to contest any liability whatsoever, except that it did not contest the right of claimants to file claims with the Workmen's Compensation Bureau. The value of the Linseed King at the end of the voyage was alleged to be $1,500. In the prayer for relief, the petitioner asked for an order directing the issuance of a monition to all persons claiming damages, citing them to appear before a commissioner and to make proof of their claims, and also to answer the allegations of the petition (paragraph 3); for an injunction staying the prosecution and determination of all suits and proceedings in respect of any claims arising out of the voyage, with liberty, however, to any claimant to file his claim with the New Jersey Workmen's Compensation Bureau (paragraph 4); and for an adjudication that the petitioner was not liable to any extent on any such claims except such as should be proper and legal claims under the New Jersey Workmen's Compensation Law, and that, as to such compensation claims (and any other liabilities imposed upon it), the liability be limited to the value of the launch (paragraph 5). In due course there was an order of this court on March 5, 1927, directing the issuance of a monition against all persons claiming damage from the disaster, and enjoining the beginning, prosecution, or determination of all suits or proceedings except the filing of claims with the Workmen's Compensation Bureau. The order directed that service of it be made upon the Compensation Bureau, and it was so served. A restraining order to the same effect was also issued. Numerous claimants then came in and controverted the petitioner's claims of nonliability and limited liability.

The matter came on for trial before Judge Hazel in January, 1928. He found that there was negligence in the operation of the Linseed King, and further that the petitioner had knowledge or privity as to such negligence. Accordingly, the petition for limited liability was denied, but the proceeding was continued in order to determine the liability of the petitioner on an unrestricted basis. (D. C.) 24 F.(2d) 967. The point was pressed by the petitioner before Judge Hazel that the New Jersey Workmen's Compensation Law was applicable to the claims of all persons who were employees or whose decedents were employees. The claimants, however, insisted that the sole issue at that time was whether the petitioner was entitled to limit its liability, and that further testimony would reveal the inapplicability of the Workmen's Compensation Law. Judge Hazel did not deem it necessary or appropriate to pass upon this point at the time, and sent the case to a commissioner to take proof as to the Workmen's Compensation feature of the case as well as to matters of damages.

The commissioner took proof as to some seventy-eight claims. In his report he has recommended no awards in several cases, and awards ranging from $300 to $15,000 in the majority of cases. As to workmen's compensation, the commissioner held the New Jersey statute inapplicable, first, because the tort was maritime, and, second, because the nature of the proceeding conferred upon the admiralty court jurisdiction to hear and determine every claim of any nature growing out of the disaster. Exceptions have been filed. The exceptions of the claimants go to the commissioner's refusal to recommend awards to certain persons and also to the adequacy of the awards recommended in other cases. The exceptions of the petitioner, in addition to complaining of awards in particular cases, present the broad proposition that there should be no awards in cases involving employees, because of the Workmen's Compensation Law. I will first give my views as to the applicability of the Workmen's Compensation Act to this case.

1. The New Jersey Workmen's Compensation Act is found in Laws of 1911, c. 95, as amended. Section 1 provides for "compensation by action at law," in which actions the employer is stripped of certain common-law defenses, and in which the employer's negligence is the main issue. Section 2 sets up "elective compensation" for personal injury or death of the employee arising out of and in the course of the employment, irrespective of the employer's negligence. This plan provides a schedule of installment payments in the manner typical of such statutes. It takes effect only by agreement of the parties, but every contract of hiring is presumed to have been made with the plan in mind, unless one party or the other has given written notice to the contrary prior to the injury or death (paragraph 9). And such agreement to abide by the plan operates as a surrender by the parties of any other method, form, or amount of compensation, a surrender binding upon the employee, his personal representative, widow and next of kin, as well as upon the employer (paragraph 8). Employers subject to the act are obliged to insure or to carry their own insurance. The Workmen's Compensation Bureau is the body by which the law is to be administered, although appeal to the courts from determinations of the bureau is provided for. There are, of course, many other details covered in the act, but the above outline will suffice for present purposes.

The rights of the parties under section 2 are contractual. Rounsaville v. Central R. R. Co., 87 N. J. Law, 372, 94 A. 392; Deeny v. Wright & Cobb Lighterage Co., 36 N. J. Law J. 121. Where the contractual status as to compensation exists between employer and employee, and injury or death is caused by accident arising out of and in the course of employment, no other remedy than under the compensation plan can be pursued by the employee or his representative; hence the personal representative of a deceased employee killed in the course of employment cannot maintain an action at law for wrongful death against the employer. Gregutis v. Waclark Wire Works, 86 N. J. Law, 610, 92 A. 354. The situation is as if the employee had said to the employer: "In consideration of your promise to pay the award set forth in the statute, in case I shall be injured or killed by accident arising out of and in the course of employment, I now relinquish any other rights that I or my representatives might otherwise have had against you by reason of such future injury or death, and will look solely to the workmen's compensation award," and as if the employer had then made the promise. The statute is said by the New Jersey courts to be a remedial law of prime import, to be broadly and liberally construed. Jersey City v. Borst, 90 N. J. Law, 454, 101 A. 1033; O'Mara v. Kirch (N. J. Err. & App.) 147 A. 511. While the compensation plan is elective, the election against the plan must be made prior to the injury or death, and it must be made in writing. After the accident has occurred, neither party can elect against the plan.

There can be little doubt that, as to regular employees who were on the boat at the time of the disaster, injury or death came from an accident arising out of and in the course of the employment. It is true that they had not yet commenced the day's work, and that they did not receive pay for the time spent in crossing the river. They were on their way to work, however, and were being transported in a conveyance owned and operated by the employer day after day to carry them to work, for the convenience of employer and...