JONES v. WATERMAN S. S. CORPORATION (READING CO., Third Pаrty Defendant)
Nos. 8930, 8945
Circuit Court of Appeals, Third Circuit
May 28, 1946
155 F.2d 992
“* * * the facts with which the Court dealt in that case [Levin v. State Assurance Co., supra] were so dissimilar to those sub judice that, in my view, the decision is not in point. Here the plaintiffs had not agreed to sell the insured property. * * * Here the required mutuality of obligation was entirely lacking.”
In this matter there is no question of any waiver of the applicable ownership condition. There is no attempt by the plaintiff to avoid the impact of the Levin decision other than to urge that the policy is to be construed under Pennsylvania and not New Jersey law. Admittedly there was a written agreement of sale for the particular premises at the time of the storm. Within a week thereafter the sаle was consummated. The issue was properly raised by the fifth defense of the supplemental answer. Under the controlling New Jersey law the agreement of sale violated the policy and bars plaintiff‘s recovery thereunder.
In view of the above, it is unnecessary to discuss the phrase “high water” in the instant policy and we express no opinion regarding it. However, it may be well to point out that while the same clause did appear in the policy in Newark Trust v. Agricultural Ins. Co., 3 Cir., 237 F. 788, it was not there construed. That case turned upon an entirely different policy condition.
Affirmed.
BIGGS, Circuit Judge, concurring.
I concur in the majority opinion and in its reasoning in all respects save one. The decision of the Supreme Court of Pennsylvania in Hardiman v. Fire Ass‘n of Philadelphia, 212 Pa. 383, 390, 61 A. 990, 991, cited in the majority opinion, sets out the applicable Pennsylvania conflict-of-laws rule. The Court in the cited case said: “The authorities are well settled that, where a policy is required to be countersigned by an agent in another state, the contract is to be governed by the law of the state where the agent resides.” It is clear that the policy in the instant case was to be countersigned in New Jersey by an agent resident therein, was in fact countersigned by such an agent and that therefore the law of New Jersey must govern the substantive rights of the parties. It is unnecessary to make any applicаtion of the parol evidence rule under the circumstances of the case at bar.
Abraham E. Freedman, of Philadelphia, Pa. (Freedman, Landy & Lorry, all of Philadelphia, Pa., on the brief), for appellant David E. Jones.
George M. Brodhead, of Philadelphia, Pa. (Rawle & Henderson and Joseph W. Henderson, all of Philadelphia, Pa., on the brief), for appellant Waterman Steamship Co.
Henry R. Heebner and Wm. Clarke Mason, both of Philadelphia, Pa. (Morgan, Lewis & Bockius, of Philadelphia, Pa., on the brief), for appellee.
Before BIGGS, MCLAUGHLIN and O‘CONNELL, Circuit Judges.
BIGGS, Circuit Judge.
The plaintiff, David E. Jones, a seaman employed by the defendant and third-party plaintiff, Waterman Steamship Corporation, brought suit against his employer in a civil action to recover maintenance and cure and wages. Jones had left his ship, the S.S. “Beauregard“, on shore leave and was proсeeding across the pier toward the street when all the lights on the pier were extinguished. As a result of the darkness he fell into an open ditch along a railway siding owned and operated by the third-party defendant, Reading Company, and sustained injuries which incapacitated him for some months. Waterman impleaded Reading Company as a third-party defendant for reasons set out hereinafter.
The suit at bar, Civil Action No. 1481 in the District Court, was instituted by Jones on the same day that he brought a civil action against Reading Company in the court below, Civil Action No. 1480, to recover damages for his injuries and expenses in connection therewith. No. 1480 was tried to a jury and a verdict wаs returned for the plaintiff in the amount of $2,387.50. Thereafter, the court granted a motion made by Reading for a new trial. See Jones v. Reading Company, D.C., 45 F.Supp. 566. Jones then settled his case with Reading for the sum of $750 and executed a general release in the latter‘s favor. The release was in the usual form and released and discharged Reading from all claims and demands whatsoever which Jones had against Reading “by reason of any matter, cause or thing whatsoever * * * and particularly, * * * by reason of injuries and losses sustained as a result of * * * the fall “to recover for which I brought suit in the U. S. District Court for the Eastern District of Pennsylvania against Reading Company, in Civil Action No. 1480, * * *.”
During the pendency of No. 1481 Waterman filed а motion to dismiss the action against it on the ground that a ship owner was not liable for maintenance and cure for an injury occurring on a pier. The motion was granted by the court below but the judgment was reversed by this court. See 3 Cir., 130 F.2d 797. Our decision was affirmed. Aguilar v. Standard Oil Co., 318 U.S. 724, 63 S.Ct. 930, 87 L.Ed. 1107. After remand Waterman filed an answer setting out the release which Jones had executed to Reading and impleaded Reading asserting that Waterman is entitled to indemnity from Reading for any sum which Jones may recover against Waterman.
The case went to trial. Jones introduced as evidence the testimony received in No. 1480. Other evidence was also received which need not be detailed here. It is enough to state thаt certain testimony was given by Jones respecting his inability to work following his medical discharge and that shipping articles of the “Beauregard” were introduced in evidence as was the release to Reading. In No. 1480 Jones sought to recover both compensation and consequential damages, the latter including, as the evidence shows, substantially all the items recoverable by Jones as maintenance and cure and wages.
The court below in the instant case concluded that “To permit the plaintiff to successfully prosecute [the action at bar] would be to enable him to obtain two satisfactions for the one injury by resort to two different causеs of action.” 60 F.Supp. 30, 32. Judgment was entered in favor of Waterman and against Jones. Judgment also was entered in favor of Reading as third-party defendant and against Waterman as third-party plaintiff on the theory enunciated in The Federal No. 2, 2 Cir., 21 F.2d 313. Both Jones and Waterman have appealed at our Nos. 8930 and 8945, respectively.
If a seaman falls sick or is injured and must be removed or is kept from his vessel he is entitled to maintenance and cure as well as to his wages. Smith v. Lykes Brothers-Ripley S.S. Co., 5 Cir., 105 F.2d 604, 605. Wages, even if they include “keep“, must be restricted to the term of employment as specified by the shipping articles while the duty to provide maintenance and cure lasts as long as the seaman‘s nеed continues. Calmar Steamship Corporation v. Taylor, 303 U.S. 525, 58 S. Ct. 651, 82 L.Ed. 993; Loverich v. Warner Co., 3 Cir., 118 F.2d 690, certiorari denied 313 U.S. 577, 61 S.Ct. 1104, 85 L.Ed. 1535. Jones has a cause of action against Waterman for maintenance and cure and for his wages as set out in his complaint in the suit at bar. This is an action ex contractu. Jones may maintain it by reason of the obligations and duties imposed on Waterman by the shipping articles and by virtue of his status as a member of the crew of the “Beauregard“. Jones also had a cause of action against Reading sounding in tort and arising ex delicto by reason of Reading‘s alleged failure properly to maintain its right-of-way. Jones was careful to restrict his complaint in the case at bar to a claim for “wаges to the end of the articles and maintenance and cure for the period of his disability * * *“. He does not seek to recover damages from Waterman.
The distinction between the right to maintenance and cure and wages and the right to damages is made clear by the Supreme Court in Pacific Steamship Co. v. Peterson, 278 U.S. 130, 138, 49 S.Ct. 75, 77, 73 L.Ed. 220, wherein Mr. Justice Sanford stated, “In short, the right to maintenance, cure and wages, implied in law as a contractual obligation arising out of the nature of the employment, is independent of the right to indemnity or compensatory damages for an injury caused by negligence; and these two rights are consistent
Jones has settled his cause of action against Reading but he is free to assert and to recover on his ex contractu cause of action against Waterman. He would be free to do this even if he had obtained a judgment against Reading and had executed it. The circumstances are somewhat analogous to those which would be presented if a person insured against personal liability were injured by an automobile driven by an alleged tortfeasor. He has sued the tortfeasor who drove the automobile which hit him and recovered a verdict. This has been set aside and he, thereafter, makes a settlement with the alleged tortfeasor. He then seeks to collect a sum of money which he alleges is due to him under his insurance policy because of his injuries. The insurance carrier says, “You hаve made a settlement with and have received money from the tortfeasor, the amount of your claim against us has been satisfied by that settlement or at the least your recovery against us must be reduced pro tanto.” This contention in substance was dealt with by the court in Dempsey v. Baltimore & O. R. Co., D.C., 219 F. 619 and was refuted. See also Sprinkle v. Davis, 111 F.2d 925, 128 A.L.R. 1101 and Clune v. Ristine, 10 Cir., 94 F. 745. The position taken by Waterman as to Jones is untenable.
In the suit at No. 1480 there was a certain confusion evinced by counsel for both parties as to the nature of the damages which Jones was entitled to prove and this confusion seems to have been carried over into the suit at bar. As we have indicated at an earlier point in this opinion, a seaman is entitled to wages only to the end of the period of time covered by the shipping articles, whereas he is entitled to maintenance and cure as long as he shall have need of them. Two sets of shipping articles were introduced in evidence. We are concerned with only one, those signed by Jones on January 6, 1941, and which were in effect on January 16, 1941, the day of the accident. It has been stipulated by the parties that these shipping articles were “closed out” on February 5, 1941. But the articles state, inter alia, that the seamen should make one or more voyages on the “Beauregard” as the master might direct “for a term of time not exceeding twenty-four calendar months.” We entertain no doubt in the light of such decisions as McCarrоn v. Dominion Atlantic Railway Company, D.C., 134 F. 762, and Enochasson v. Freeport Sulphur Co., D.C., 7 F.2d 674, that Waterman‘s obligation to pay Jones’ wages endured as long as the period for which he claims maintenance and cure. Since this was the fact the District Court at No. 1480 could not have permitted Jones to recover from Reading damages based upon maintenance and cure and wages. Jones was entitled to recover in the suit at No. 1480 only compensatory damages including an amount to be awarded for pain and suffering. Since Jones was not entitled to recover damages for maintenance and cure and wages in the suit at No. 1480, all other considerations aside, these elements may not be deemed to have been included in the settlement of the suit at No. 1480.
We come now to the final phase of the case at bar. The question presented by it may be summed up as follows: May Waterman recover from Reading any sum which it may be required to pay to Jones for maintenance and cure and wages? In other words, if Waterman pays Jones, is Waterman entitled to indemnity from Reading if it be found that Reading negligently caused Jones’ injuries? The third party complaint filed by Waterman does not allege specifically that Reading was negligent or that Jones was injured by reason of Reading‘s negligence. It does aver,
Whether Waterman may maintain its action against Reading in the present suit depends in part on whether the cause of action set out in the third-party complaint can be fitted into the frame of Rule 14(a).2 The answer to this question turns in large part on the construction of the word “claim” as used in the rule. We think it wоuld be difficult to employ a more inclusive term, and, as is stated in Moore‘s Federal Practice, Vol. 1, at p. 742, “* * * it is reasonably certain that Federal Rule 14 sought the same general objectives as * * * Admiralty Rule [56].” Admiralty Rule 56, 28 U.S.C.A. following section 723, is very broad and, if the suit at bar were in admiralty, would permit the defendant to maintain the third-party complaint under the assumption of proof which we have made. Moore states also at p. 740, that “The general purpose of Rule 14 is to avoid two actions which should be tried together to save the time and cost of a reduplication of evidence, to obtain consistent results from identical or similar evidence, and to do away with the serious handicap to a defendant of a time difference between a judgment against him, and a judgment in his favor against the third-party defendant.” If Waterman will have a claim which it can assert against Reading because compelled to pay Jones money which, absent Reading‘s negligence in relation to Jones, it would not have to pay, Waterman may assert that claim in the suit at bar by way of its third-party complaint.
The primary question therefore is whether or not Waterman has a cause of action which it can assert against Reading if Waterman is compelled to pay Jones. We think that Waterman has such a cause of action if it can рrove that Reading‘s negligence was the cause of Jones’ injuries. If Waterman can recover from Reading it can do so because a cause of action arises under the law of Pennsylvania where the operative facts occurred.3 and 4 No Pennsylvania case in point has been cited to us
At common law an employer could maintain an action against a tortfeasor to recover damages on account of loss of services which he sustained by reason of an injury to his employee.5 This cause of action included damages measured by the loss of the employee‘s services. See 35 American Jurisprudence, Master and Servant, § 530, and the authorities cited therein, and 18 R.C.L., 542, § 58. As to servants infra moenia, some cases held that the master could recover only his out-of-pocket expense due to being deprived of the services. This rule of law persisted to a rather late date in New York. See Tidd v. Skinner, 225 N.Y. 422, 122 N.E. 247, 3 A.L.R. 1145. These rights in substance were those of indemnification. Some of the early cases permitted indemnification against an intentional tortfeasor and denied it as to a merely negligent tortfeasor. The Supreme Judicial Court of Massachusetts did not make such a distinction in Ames v. Union Railway, 1875, 117 Mass. 541, 19 Am.Rep. 426, but permitted a master to recover for the loss of apprentice‘s services, the latter having been injured due to negligent operation of the railway. See Coal Land Development Co. v. Chidister, 86 W.Va. 561, 103 S.E. 923. The American courts seem to have made no distinction between loss of services caused by intentional wrongdoing, such as assault and battery, and those in which the loss of services resulted from mere negligence. See Voss v. Howard, Fed.Cas. No. 17,013. The case of Cain v. Vollmer, 19 Idaho 163, 112 P. 686, 32 L.R.A. N.S., 38, seems typical. In this case a jockey was injured by a dog, negligently permitted to wander at large by its master. The employer of the jockey sued to recover the value of the prizes which the jockey might have won had he been able to ride. The damages, however, were held to be too speculative to permit recovery. The Supreme Court of Idaho, however, clearly found that a cause of action existed. Compare Fluker v. Georgia Railroad & Banking Co., 81 Ga. 461, 8 S.E. 529, 2 L.R.A. 843, 12 Am.St.Rep. 328.
A case which denies the master‘s right to recovery is Chelsea Moving & Trucking Co. v. Ross Towboat Co., 280 Mass. 282, 182 N.E. 477. The Supreme Judicial Court of Massachusetts distinguished Ames v. Union Railway, supra, on the ground that the employee in the Ames case was an apprentice and the relationship between master and apprentice was different from that of an ordinary employer and employee, which was purely contractual. The Chelsea Moving & Trucking Co. case is the only decision among the early cases which we have found (though doubtless there are others in the deeps of the law) which holds that an employer cannot recover indemnity for the loss of his employee‘s services, whether the loss was caused by intentional wrongdoing or negligence. The English law may have gone off in the direction of permitting recovery only if there had been intentional tortious interference with the employer and employee relationship. Lumley v. Gye, 2 El. & Bl. 216, may be said to look in that direction. But the general law in the United States upon this subject seems settled.6
If the principles of the majority of the decisions cited in the foregoing paragraph are sound it would follow that indemnity or recovery over may be had against a pier owner, or one holding under him, by a ship for sums expended by it for the maintenance and cure of one of its seamen injured because the pier was not maintained in a condition fit for the business purpose for which it was intended. The duty to maintain the pier, or a railroad track running upon it, in a safe condition for the benefit of seamen leaving a ship moored to the pier is a warranty implicit in the contract between the pier owner and the ship and in the contract or arrangement between the pier owner and the railroad
We come finally to such Pennsylvania cases as there аre. There is no doubt that under the Pennsylvania law an employer has a right to recover against a tortfeasor for an act deliberately intended to deprive him of the services of his servant. Such a right was recognized by the early Pennsylvania decisions dealing with labor relations.8 We believe that the law of Pennsylvania follows the general law and will permit the employer to recover from a negligent tortfeasor for the value of the services of his injured employee, though we can find no decision directly in point upon this question. It is the law of Pennsylvania that property owners may recover indemnity from persons whose primary negligence has сaused them to pay damages to injured persons. See Orth v. Consumers’ Gas Co., 280 Pa. 118, 124 A. 296, and Wise Shoes, Inc., v. Blatt, 107 Pa.Super. 473, 164 A. 89. Here the duty imposed upon the corporations primarily liable sounds in tort and grows directly out of the failure to maintain premises properly. The Pennsylvania labor relations cases and the two decisions last cited throw some light on the problem of law presented. Moreover, it must be borne in mind that the obligation of Waterman in the instant case grows out of the maritime law. Waterman cannot escape the burden of Jones’ maintenance and cure and it could not escape the loss of his services. Each element of the loss rose out of Reading‘s tort, assuming Reading to have bеen negligent. We think that under these circumstances the law of Pennsylvania will permit Waterman to recover not only for the loss of Jones’ services but for the sums which it will be compelled to expend for his maintenance and cure.
In so holding we are not unmindful of the decision of the Circuit Court of Appeals for the Second Circuit in The Federal No. 2 which held to the contrary under circumstances analogous to those at bar. The substance of that Court‘s ruling appears in 21 F.2d at page 314, where, after reference to a “social condition” which permits a father to recover for the loss of the services of a child or a husband for those of his wife, states, “But this social condition does not exist in the relationship of a seaman and his employer. It is a contract obligation, which [the employer] must perform, that imposes this responsibility, even though it be a special damage he suffers from a tortious act. The cause of the responsibility is the contract; the tort is the remote occasion.” In Seas Shipping Co., Inc. v. Sieracki, Mr. Justice Rutledge makes it plain that the obligations of the ship to its seamen do not rest solely in contract; that a seaman is in effect a ward of the admiralty and that the relationship between owner and seaman, master and seaman, and ship and seaman is in essence a “consensual relationship“. We are of the opinion that the relationship of the ship owner to the seaman is more closely analogous to that of father and child than to that of an employer to a mere employee.
The status of the ship to its seaman bears comparison to that of a sоldier in the United States Army to the United States. In United States v. Standard Oil Co., D.C.S.D.Cal., 60 F.Supp. 807, the United States sued the Standard Oil Company for indemnity for the money expended by it to cure an enlisted man of the United States Army who had been struck by the defendant‘s truck and for the soldier‘s wages during the period of his incapacity. The court permitted the recovery of both items. While the status of an enlisted man in the armed forces of the United States may be described as statutory and the obligation of the ship to grant maintenance and cure to the injured seaman arises under the admiralty law as embodied in decisions, the principle of liability so clearly enunciated in the cited case should be applicable under the facts of the case at bar. While the courts of the Commonwealth of Pennsylvania have not applied the maxim “Ubi jus, ibi remedium“, they have been apt in indemnifying injured employers and we conclude that it is no very great innovation to permit Waterman to recover from Reading for maintenance and cure to be paid by it to Jones, if Reading‘s negligence is found to be the cause of Jones’ injuries.
It is clear that the release executed by Jones to Reading will not avail Reading in the third-party action for the right of Waterman against Reading is not a derivative right through Jones but is a separate and distinct cause of action which will vest in Waterman when it is ascertained what sum of money is due from Waterman to Jones. Cf. United States v. Standard Oil Co., supra.
The judgment against Jones and in favor of Waterman will be reversed. The judgment in favor of Reading and against Waterman will be reversed. The cause will be remanded with the direction to proceed in accordance with this opinion.
MCLAUGHLIN, Circuit Judge (dissenting).
I agree with the majority that Jones has a right ex contractu against the Waterman company for wages, maintenance and cure. I dissent from the finding that the Waterman company in its turn can recoup such payments from the tort-feasor railroad.
Crab Orchard Imp. Co. v. Chesapeake & O. R. Co., 4 Cir., 115 F.2d 277, presented quite similar facts. There the Court in an exhaustive opinion determined that the employer had no claim against the third party tort-feasor. The principles of both indemnity and subrogation were held inapplicable because the tort-feasor was not benefited by the employer‘s payments and because of the vast difference between the duties and liabilities of the employer and those of the tort-feasor. There is no more factual basis here for indemnification or subrogation than appeared in that matter.
The Pennsylvania cases cited in the majority opinion as holding “that property owners may recover indemnity from persons whose primary negligence has caused them to pay damages to injured persons” dо not assume to govern an action founded on a contract status. Other Pennsylvania decisions may indicate a liberal trend in dealing with injuries to employees but afford very slim ground on which to predicate the Court‘s opinion on the instant problem. The Pennsylvania workmen‘s compensation law allows an employer‘s subrogation action against a third party tort-feasor,
The majority further asserts that indemnity is indicated because of the maritime contract between Jones and the Waterman company with that relationship controlling between Waterman and the railroad. Under such pronouncement there is created generally a greater responsibility to a sailor than to a landsman which would exist in favor of a ship operator simply because of his special liability to his seamen. No valid reason is advanced for such radical extension of the underlying maritime theory. Lastly the Court opinion states that the logic of the law suggests the allowed indemnity. Even if this were to be assumed, arrival at such logical result necessitates holding the defendant under a liability which did not attach to it at the time of the occurrence. The logic involved might be for consideration of the Pennsylvania Legislature in establishing the same type of statutory indemnification against a third party tort-feasor as that body has already fixed in workmen‘s compensation, but the question is not properly before us on this appeal.
UNITED STATES ex rel. RUBINSTEIN v. MULCAHY, U. S. Marshal.
No. 312.
Circuit Court of Appeals, Second Circuit.
June 14, 1946.
CLARK, Circuit Judge, dissenting.
