WE HEDGER TRANSP. CORPORATION v. Gallotta

• Decision Date: 30 October 1944
• Docket Number: No. 121.,121.
• Citation: 145 F.2d 870
• Parties: W. E. HEDGER TRANSP. CORPORATION v. GALLOTTA et al.
• Court: U.S. Court of Appeals — Second Circuit

145 F.2d 870 (1944)

W. E. HEDGER TRANSP. CORPORATION v. GALLOTTA et al.

No. 121.

Circuit Court of Appeals, Second Circuit.

October 30, 1944.

Before L. HAND, SWAN and CLARK, Circuit Judges.

Christopher E. Heckman and Foley & Martin, all of New York City, for Hedger Corp.

Albert P. Thill and John P. Smith, both of New York City, for Manhattan Co.

Samuel Spevack and Michael J. Esposito, both of Brooklyn, N.Y., for Gallotta.

L. HAND, Circuit Judge.

The appellant, Hedger Company, in a proceeding brought under the 51st Admiralty Rule, 28 U.S.C.A. following section 723, to limit its liability as a shipowner, appeals from an order denying a motion to reinstate a stay of an action for personal injuries, brought by the appellee, Gallotta, in the state court. The facts upon which the decision depended were as follows. The Hedger Company owned the barge, "M. A. Lenahan," which it chartered orally to the appellant, Manhattan Lighterage Company, and which that company subchartered to a company, called the Commodity Credit Company. Gallotta was a longshoreman; he worked on the barge while it was in the possession of the subcharterer, fell into the hold, and was injured. He sued the Hedger Company in the state court on the ground that the barge was defective, demanding $25,000. The Hedger Company filed a petition in the District Court to limit its liability to $7000, the alleged value of the barge; and in the proceeding Gallotta filed a consent to the limitation of liability, and agreed that the value of the barge should be fixed in the admiralty court. That court thereupon vacated a stay of Gallotta's action which the Hedger Company had procured when it filed its original petition. Shortly thereafter, Gallotta joined the Manhattan Company and the Commodity Credit Company as defendants in his action, charging them also with responsibility for the condition of the barge. The Commodity Credit Corporation moved to dismiss the action as against it, and succeeded; the Manhattan Company answered and filed a cross-claim against the Hedger Company, seeking to recover upon the breach of the Hedger Company's covenant of seaworthiness implied in the oral charter. The Hedger Company then moved in the limitation proceeding to vacate the order dissolving the stay of Gallotta's action, upon the ground that the cross-claim of the Manhattan Company constituted a second claim against it; thereby created the situation for which the limitation proceeding was intended; and thus made it necessary to bring the two claims into concourse, and to adjudicate them in the admiralty court. The judge denied this motion, but declared that the order should not be construed to permit the Manhattan Company to litigate its claim against the Hedger Company outside the limitation proceedings. The Hedger Company and the Manhattan Company then appealed.

The first question is whether an appeal lies from the order. We think that it does, because it falls within § 227 of Title 28 U.S.C.A. in that an injunction against Gallotta's prosecution of his action was refused to the Hedger Company, and an injunction, outstanding against the Manhattan Company's cross-claim, was not vacated. We should have no doubt that the case was controlled by Enelow v. New York Life Ins. Co., 293 U.S. 379, 55 S.Ct. 310, 79 L.Ed. 440, were it not for Schoenamsgruber v. Hamburg-American Line, 294 U.S. 454, 457, 55 S.Ct. 475, 79 L.Ed. 989, which held in an admiralty suit upon a contract, that an order was not appealable which stayed the trial until after arbitration proceedings had been completed. It is true that the Fifth Circuit in Stark v. Texas Co., 88 F.2d 182, 183, construed this decision as denying the appealability of any order in a limitation proceeding which dissolved a stay of an action in the state court. They thought that § 227 of Title 28 U.S.C.A. applied "only to injunctions issued in equity proceedings," and had "no application to an interlocutory order issued in a suit in admiralty." The Supreme Court did indeed say, in Schoenamsgruber v. Hamburg-American Line, supra, at page 457 of 294 U.S., at page 477 of 55 S.Ct., 79 L.Ed. 989, that "save as therein otherwise specified, section 129 extends only to suits in equity," and that courts of admiralty "do not have general equitable jurisdiction"; but it added that, "except in limitation of liability proceedings, they do not issue injunctions." Even verbally, this language appears to us to assume that courts of admiralty do issue injunctions in limitation of liability proceedings; and the 51st Admiralty Rule itself concludes by providing that the court may "make an order to restrain the further prosecution of all and any suit or suits against said owner." While the Rule does not actually use the word "injunction" — which, we must concede, is the only word used in § 227 of Title 28 — such orders are in every true sense "injunctions." But the vital point, as we view it, is that in Schoenamsgruber v. Hamburg-American Line, supra, the order appealed from had not stayed the prosecution of another action, but had merely postponed the trial of the suit in which it was made; had in fact been no more than an enforced continuance. The Ninth Circuit, in The Helen L., 109 F.2d 884, 886, took jurisdiction of an appeal from an order which dissolved...