The George W. Roby

111 F. 601 | 6th Cir. | 1901

LURTON, Circuit Judge,

having made the foregoing statement of the case, delivered the opinion of the court.

Upon an attentive examination of the whole of the evidence,— evidence which presents something more even than the usual conflict found in all such cases,—we have reached the conclusion that the court below did not err in finding both vessels at fault.

i. The Blorida was clearly at fault in respect to her speed. Ride 15 of the “Act to regulate navigation on the Great Bakes and their connecting and tributary waters’’ (28 Stat. p. 645) is as follows:

“Every vessel shall, in thick weather, by reason of Cog, mist, falling snow, heavy rainstorms, or other causes, go at moderate speed. A steam vessel hearing, apparently not more than four points from right ahead, the fog signal of another vessel, shall at once reduce her speed to bare steerage-way, and navigate with caution until the vessels shall have passed each other.”

It is not unlikely that while the Roby was blowing her two signals of one blast the Blorida was blowing her fog wliistle, and that the last fog signal blown by the Blorida was mistaken by the Roby for a two-blast passing signal, and returned as such. This theory explains the blowing together testified to by the witnesses from the St. Paul, and partly explains why the Roby’s single-blast signals, which we must believe were blown by her, were not heard on the Florida. But it is unnecessary to undertake to reconcile the evidence in respect to the signals blown by the Roby. For the purposes of this case we may accept the account of the matter; given by the Florida witnesses, namely, that no signal, fog or passing, was heard on the Florida until the colliding vessels were within a little less than half a mile of each other, and that there was then heard a passing signal of two' whistles, which seemed' to come from nearly ahead. Upon the weight of evidence, the Florida’s speed was at that moment not less than six miles per hour. Upon the seeming bearing of that single passing whistle, and without being able to see the approaching vessel, she changed her course by putting her wheel hard a-starboard, and kept her speed. In a moment the top of the spar of the Becker, in tow of the Roby, came in sight, and a second, or so later the top of the Roby’s wheelhouse was seen. In this' situation she was put under full speed in the desperate hope that the seeming course of the Roby could be crossed before the latter could reach the point of intersection. The 1 effort failed. The Roby’s bow struck the Florida about amidship, cutting very deeply into her hull, and penetrating her cargo. Upon hearing the whistle of the Roby so near, and apparently right ahead, prudent navigation required that she should at once stop and reverse, until the location and course could be ascertained with certainty by either sound or sight. The City of New York, 147 U. S. 72, 84, 13 Sup. Ct. 211, 37 L. Ed. 84; The Umbria, 166 U. S. 404, 417, 17 Sup. Ct. 610, 41 L. Ed. 1053; The Fountain City, 10 C. C. A. 278, 62 Fed. 87, 22 U. S. App. 301, 309; The North Star, 10 C. C. A. 262, 62 Fed. 71, 22 U. S. App. 242. The fog was dense. The vessels appeared to be very near and to be drawing nearer. The only indication of the location and course of the Roby was the apparent bearing of ¿ single .passing whistle. Upon this uncertain basis for an opinion, the Florida maintained her speed and put her helm hard a-starboard. In the case of The New York, cited above, the court, in speaking of the duty of a steamer in a fog upon hearing the fog horn of an approaching vessel, said:

“Upon hearing the fog horn of the bark only one point on her starboard bow, the officer in charge should at once have checked- her speed, and, if the sound indicated that the approaching vessel was near, should have stopped or reversed until the sound was definitely located or the vessels came in sight of each other. Indeed, upon the testimony in this case, it is open to doubt whether, if the engine had been at once stopped, the steamer would have come to a standstill before .she had crossed the course of the bark. There is no such certainty of the exact position of a horn blown in a fog as will justify a steamer in speculating upon the probability of avoiding it by a change of the helm, without taking the additional precaution of stopping until its location is definitely ascertained.” The Hypodame, 6 Wall. 216, 18 L. Ed. 794; The Kirby Hall, 8 Prob. Div. 71; The Sea Gull, 23 Wall. 165, 23 L. Ed. 90; The Ceto, 6 Asp. 479, 14 App. Cas. 670.

We think this is j’ust as applicable to a fog whistle as to a fog horn, and as applicable to two steamers in a fog as to a steamer and sailing vessel. The observation of the court in that case was bottomed upon a line of English and American cases, many of which were discussed by Judge Taft in delivering the opinion of this court in the North Star Case, cited above, and need not be again discussed.

In the case of the Umbria, cited above, Justice Brown, after an elaborate consideration of the English and American cases, reached the conclusion that:

“Tlie general consensus of opinion in this country is to the effect that a steamer is bound to use only such precautions as will enable her to stop in , time to avoid a" collision, after the approaching vessel conies in sight, provided such approaching vessel is herself going at the moderate speed required by law. In a dense fog this might require both vessels to come to a standstill until the course of each was definitely ascertained. In a lighter fog it might authorize them to keep tlieir engines in. sufficient motion to preserve their steerageway.”

Here the fog was dense, and the circumstances of the case admitted of no modification by reason of the light character of the fog. But it is said that the right of vessels on the Great Ealces to navigate in a fog has been regulated by the act of 1895, known as the “White Eaw,” and that under the rules of navigation there prescribed vessels are no longer under any duty to stop and reverse, provided they have agreed upon how they shall pass each other. But rules 15, 23, 26, 27, and 28 of the act of 1895 must be read and construed together. Rule 15 requires, without regard to nearness, that, on hearing a fog signal of another vessel within four points of right ahead, speed shall he reduced at once to “bare steerageway.” Rule 26 is intended to apply to the ordinary circumstance of a failure to come to an agreement as to passing before coming within. a half mile of each other. In such case the duty to reduce speed, and to stop and reverse, if necessary, is imposed, regardless of fog conditions, when the vessels come within the distance named by the statute. But under rule 15 the duty of such reduction of speed is imposed when the bearing of a fog whistle is within four points of right ahead, without regard to the distance of the vessels apart. The reduction of speed required by the rule must also be accompanied by “cautious” navigation “until the vessels pass each other.” By rule 27 it is required that in obeying and construing these rules “due regard shall be had to all dangers of navigation and collision,” etc., and by tlie 28th rule it is declared that the rules shall not operate to exonerate any vessel from the consequences of any “neglect to carry lights or signals, or of any neglect of any precaution which may be required by the ordinary practice of seamen, or by the special circumstances of the case.”

What would be the “cautious” navigation required after a vessel had reduced her speed as required by rule 15, or what precautions should be taken by vessels approaching each other in a fog, would depend upon the special circumstances, and in the determination of any question arising out of the navigation of colliding vessels, where the regulations prescribed by congress do not expressly apply, resort must be had to the sailing usages and principles of navigation which are not superseded by the positive terms of the statute. These rules or sea laws defining the precautions required by, good seamanship, and cautious navigation are to be deduced from the decisions of courts of admiralty, and are not to be regarded as superseded, excépt in so far as they are inconsistent with the statutory regulations. The Sea Gull, 23 Wall. 165, 173, 23 L. Ed. 90. To our minds, there can be no doubt but that under a long-line of well-settled decisions there was apparent risk of collision in proceeding even at a reduced speed, with no other knowledge of the location and precise course of the Roby than* that afforded by the .first passing signal heard on the Florida. Confessedly, the vessels were within a half mile of each other, and apparently the Roby was nearly right ahead. If both vessels were moving’ at the speed each claims for itself, the vessels would meet in three or four minutes. The density of the fog prevented any sight of either'vessel from the other. To go ahead on the chance of safety from the. change of course authorized by the passing agreement was to take a risk not justified, by sound principles of navigation nor authorized by the positive rules of congressional legislation. Upon hearing the passing signal, of the Roby so near ahead and so close at hand, the Florida should have stopped and come to a standstill until the location and course of the Roby could be definitely ascertained.

2. For the Roby it is very earnestly urged that she checked down about xo minutes before the collision, on hearing the Florida exchange passing signals with the St. Paul, and that she ran under bare steerageway until about a minute and a half before the collision, when her engines were stopped and backed wide open, and that her headway was nearly gone when the collision occurred. It is insisted that the Roby’s speed under check was between four and five miles, and that this speed was as low as was possible to maintain her steerageway. The fifteenth rule was plainly applicable to the situation of the Rob)¹-, and it devolves upon her to show that she reduced her speed as required by the statute. “Bare steerage-way” means the lowest speed consistent with the maintenance of headway. We are not satisfied that a speed of 5 miles per hour was the lowest speed at which the Roby could maintain headway. The evidence of Captain Smith, the master of the Roby, that 30 revolutions of her engine per minute were necessary in order that her engine should be “handled easily,” and that 30 revolutions gave a speed of from- 4 to 5 miles, was based on what his engineer had, said to him. Oddly enough, the engineer was not examined on this point. The evidence of Captain Smith, taken as a whole, leads to the impression that he took a distinction between speed which “easily” enabled his vessel to keep her course and gave the helmsman little “trouble” to keep her from falling away, and that low speed required by the emphatic words of the statute which might suffice to keep a vessel-on her course, even if much shifting of the helm be necessary to keep her from falling away. The mate of the Roby recognized this difference, and was of opinion that two miles per hour would enable the maintenance of steeragewav. Certain it is that the speed of the Roby was such as to render fruitless all efforts to stop her, which were begun shortly before the vessels became visible to each other. The direction and force of the blow tend to corroborate the witnesses from the Florida that when she came in sight she showed a considerable “bone in her teeth.” The estimate that her speed was then about ten miles per hour is doubtless much exaggerated, but we are convinced that her speed was considerable when she came within two lengths of the Florida, and that her headway had by no means been lost when the collision occurred. These conclusions lead to two results: First, that while running under check her speed was not as low as it should have been; and, second, seasonable efforts were not made to stop and back. We shall not attempt to reconcile the conflicting evidence in respect to the signals blown by the Roby. On her own account of the matter she blew two signals of one blast each, which were not returned. She then blew an alarm. Between each of these signals there Avas the usual interval. The silence of the Florida while these signals were being blown was only broken by a fog Avhistle blown after the first passing signal. Assuming that this alarm was bloAvn as claimed, it is not improbable that it was mistaken on the Florida for a two-blast passing signal, and replied to as such. The helm of the Roby was then put hard a-starboard. A second tAVo-blast was then heard. Thereupon the engine whistle was bloAA'n to stop, back, back strong, etc. Before her headway had been stopped, and before she had swung but little under her starboard helm, the collision occurred. The effort to stop and back was postponed too long. Captain Smith had every reason to fear he Avas rurniug a risk of collision. He could not know the position or course of the Florida Avith any such certainty as to justify him keeping on after he failed to get a response to his first signal of one blast. ITe had judged that the first fog signals he heard from the Florida were three points off his port bow. This w-as when the Florida Avas about three miles up the lake. When this distance AA’as reduced about one-half he judged her passing signals to the St. Paul to be still three points off his port bow. When she saluted the Si. Paul Avhen abreast he still judged her Avhistle to have the same bearing. The fog whistle which he heard after his first signal of one whistle was still judged by him to be three points off his port bow. That the Florida was approaching all the time he recognized. The fact that although she was approaching the bearing of her Avhistle did not broaden off his port bow Avas high evidence that if his original judgment of her bearing was correct the Florida was on a course which was drawing nearer and nearer to his OAvn, and that in proceeding he was running a risk of collision. The North Star, 10 C. C. A. 262, 273, 62 Fed. 71.

“In practice, one of the most usual indications of risk of collision is that the approaching ship remains upon the same hearing from the observing ship for an appreciable length of time.” Mars. Mar. Coll. (2d Ed.) 350.

The captain of the .Roby, testifying as an expert, said, in speaking of the means of locating an unseen approaching vessel by sounds, “that after she approaches you she will broaden off if she is on a parallel course.” As she did not broaden off, he ought to have realized that she was on a course which- was not, parallel to his own, but a course which was drawing nearer and nearer his own. But if the benefit of a doubt be given in respect to the duty of coming to a standstill when the Florida’s fog whistle was heard in reply to the first passing signal of one whistle, we have no doubt but that, when a second passing signal failed to elicit a reply, every effort should have been made to stop and come to a standstill until the Florida could be located. The sequel shows, as is most always true in such cases, that a difference of a few seconds would have saved a collision. Instead of stopping then, an alarm was blown, which was followed by two whistles in reply to what was supposed to be two whistles from the Florida. The duty of stopping and definitely locating the approaching vessel rested strongly upon the Roby under her own view of the facts, and we are agreed that for this fault, as well as for failing to reduce her speed to bare steerageway when she first checked down, she must be condemned. The Roby is also to be condemned for not maintaining a proper lookout. The lookout enrolled as such was engaged in scrubbing deck during -the whole of the events which resulted in a collision. The captain and his wheelsman were the only men forward on the deck engaged in the navigation of the ship. The Roby was then traversing a peculiarly crowded pathway for lake commerce, in a dense fog. The situation was one which demanded the utmost vigilance and caution. The duty of having as a lookout one giving his undivided attention to the duties required of lookouts is not lessened by anything in the act of 1895. Captain Smith, standing on top of the pilot house, was upon this occasion engaged in directing the navigation of his vessel, blowing engine whistle signals to his engineer and blowing by hand his fog whistle.- True', his engine and fog whistles were operated by means of cranks, which could be moved without changing his place on the pilot house. In addition to all these duties he was the sole lookout. It is a plain fault for the master of a vessel to also assume the duties of a sole lookout. Chamberlain v. Ward, 21 How. 548, 16 L. Ed. 211; The Ottawa, 3 Wall. 268, 18 L. Ed. 165 ; Mar. Coll. 496. -In the situation of the Roby the necessity for the undivided vigilance and attention of a lookout was particularly urgent. The only defense made upon this point is that the Roby should not be condemned for the failure to maintain a lookout, if the presence of one would not have availed to prevent the collision. The Blue Jacket, 144 U. S. 371, 389, 12 Sup. Ct. 711, 36 L. Ed. 469; The Dexter, 23 Wall. 69, 23 L. Ed. 84; The Annie Lindsley, 104 U. S. 183, 26 L. Ed. 716. 'But the absence of the lookout from duty under the circumstances of this case was flagrant negligence, and the burden of showing that the, collision could not have been guarded against by a lookout rests heavily upon the Roby. The Farragut, 10 Wall. 334, 19 L. Ed. 946; The Ariadne, 13 Wall. 479, 20 L. Ed. 342; Robinson v. Navigation Co., 20 C. C. A. 86, 73 Fed. 883; The Emma Kate Ross (D. C.) 41 Fed. 826, 828.- For the Roby it is urged that no numher of lookouts could have added anything to the information which Captain Smith had “as to the presence, course, and purpose of the Florida, or gathered any information to change the navigation of the Roby.” 'We are not prepared to say that Captain Smith had all of the information a vigilant lookout could have given him touching the approach and course of the Florida, and especially touching the bearing of her whistle sounds. He does not pretend to have taken the exact bearings of the signal whistles he heard from the Florida. Possibly he could not, and possibly an attentive, watchful lookout in the eyes of the ship could not. But are we authorized to say that such a lookout might not have noticed that the bearing of the Florida was not so far off the port bow of the Roby as Captain Smith judged? The captain’s judgment was that the bearing was about three points, while his wheelsman judged that the bearing of the same sounds was from one to two points off her port bow. Who was right? The men on the Florida judged that the bearing of the Roby was nearly right ahead, and not over a half point off their starboard bow. Which of these estimates was right? Estimates of the distance between the St. Paul and the Florida, when they passed each other, varied from one-half to one mile. - The Florida was inside of the St. Paul, which had passed up about one mile inside the Roby and on a course about parallel with that of the Roby. The St. Paul and Florida passed each other under a starboard agreement. Did the Florida starboard in accordance with the agreement? If so, this must have drawn her nearer to the course of the Roby. The evidence from the deck of the Florida is that she did not starboard her wheel until she received a two-blast signal from the Roby. But the Roby people say that they gave no such signals until they received one of that character from the Florida. Was a fog signal from the Florida mistaken for a two-blast passing signal? If not, how does it happen that Captain Smith supposes he heard such a signal? Upon that assumption he starboarded his wheel. The disinterested witnesses from the St. Paul unite, in saying that the Florida blew simultaneously with the Roby; the former blowing one blast, while the latter blew ,twro. The Roby people say that they did blow two signals of -one blast and got no response to either. Was this due to the fact that the Florida’s whistle was not heard, or are the St. Paul -witnesses wholly mistaken in saying that both boats blew together? For the purpose of determining the knowledge that each boat had of the signals heard from the other, and of determining what signals were blown on each boat, we have, in a form'er part of’this opinion, assumed the truth of the story which comes from the deck of each boat as to signals given and heard. But can it be said that a watchful and attentive lookout might not have confirmed the testimony concerning the simultaneous blowing of cross signals before the Roby confessedly changed to a signal of two blasts? The course of the Florida before she changed her wheel to starboard, according to her wheelman, was S. E. -kj S. At the time of the collision it was N. E. by E. This involved a change of 794 'points. So remarkable a change has been the subject of much very .sensible comment by counsel for the Roby, and it has been very plausibly argued that the course of the Florida was not correctly given by her wheelsman. If counsel are right in the argument that the change in the Florida’s course under starboard wheel was not 794 points, but 4 and a fraction, it only results that the course of the Florida, before the exchange of signals of 2 blasts, must have been a course which was drawing nearer and nearer to the course of the Roby, and which would carry her across her bows. But Captain Smith made no discovery of this sort in the changed bearing of signals. Down to the last signal he heard, he judged the Florida to be 3 points off his port bow, and entertained no fear of a collision until the Florida came in sight. These considerations, and others which arise upon the very conflicting evidence of a very voluminous record, induce the feeling that it is not' satisfactorily shown that Captain Smith had all the information which could have been derived from a lookout giving undivided attention to his duties.

3. It is next insisted that it was error to give to the owners of the Roby the benefit of the limited liability act (9 Stat. 635). The contention is that the Roby was insufficiently manned in respect to a- lookout. By virtue of his office and the rules of maritime law, the master’s duty was to select and station his crew. Butler v. Steamship Co., 130 U. S. 527, 554, 9 Sup. Ct. 612, 32 L. Ed. 1017. Among the crew were two watchmen, whose duty it was to serve as lookouts. It is in evidence that the master was accustomed to require from these watchmen certain other services in the daytime, and that on this occasion the watchman on duty as a lookout had been ordered aft to scrub deck. Under the circumstances existing, this was an act of grave negligence. But it was the duty of the master, and not that of the owners, to see that a competent lookout was always on duty. If the master chose to assign to the lookout a duty which took him. from his station or divided his attention, how could the owners prevent it ? A -case might be made against the owners if it was shown that they were privy to such an act of negligence, or that they knew that the master was in the practice of keeping no lookout, or of requiring other duties inconsistent with the watchfulness and undivided vigilance constantly due from' a. lookout. No such case is made here. The owner.is not to be deprived of the benefit of the limited liability act, afforded by the provisions of section 4283 of the Revised Statutes, for the misconduct of the officers or men of the vessel, to which he is not privy. Walker v. Transportation Co., 3 Wall. 150, 18 L. Ed. 172; Butler v. Steamship Co., 130 U. S. 527, 554, 9 Sup. Ct. 612, 32 L. Ed. 1017; The Longfellow, 45 C. C. A. 379, 104 Fed. 360.

4. We come now to the question of damages and their apportionment. Both vessels being at fault, the damages must be divided. The appraised value of the Rob)r was $59,300. The claims against her and allowed were as follows: (1) The value of the Florida’s' cargo, represented by the British & Foreign Insurance Company, with interest to date of commissioner's report, August 28, 1899, $65,293.33; (2) the claims of the appellants Peter P. Miller and others, as trustees for cargo not represented by the British & Foreign Insurance Company, including interest to same date, $6,026.71; (3) the claims of same as trustee for the effects of officers and seamen of florida, $1,462.79; (4) the claim of the same as owner of the Florida for one-half the value of that steamer, including interest to same date, less one-half the damage sustained by the Roby, $45,596.56. The owners of the Florida also preferred a claim for the loss of the unexpired term of the charter for the steamer for the season of 1897, a value reported by the commissioner as $13,889.52. This claim was disallowed, (a) The claim of the owners of the Florida to recover the value of the unexpired term of a season charter in addition to the full value of the lost vessel and her freight pending was properly rejected. The general rule is that, where the loss is total, the estimated profits'of a charter not yet entered upon are always rejected. Where the loss is partial, the damages, for very apparent reasons, include all loss due to detention for repairs, which may include the profits of a charter not yet entered upon. In such case the question is as to the value of the use. of the vessel while undergoing repairs. The distinction is elaborated and the authorities cited in the case of The Umbria, 166 U. S. 404, 421, 17 Sup. Ct. 610, 41 L. Ed. 1053, which case was followed by this court in the case of Mason v. Insurance Co. (decided at June session) 110 Fed. 452. The fact that the Florida was under a charter party for the season affords no reasonable room for a distinction. The compensation was payable in monthly installments. One installment had been earned and paid. Appellants were also permitted to recover for freight pending. The future installments were not earned nor entered upon, but as-a compensation the owners were permitted to recover the full value as a substitute for the vessel and all her future earnings, (b) The fund applicable to pay all the damages consists in the appraised value of the Roby, the owners of the latter having availed themselves of the benefit of the limited liability act. That fund does not more than equal one-half of the total damages. If all of the claimants stood upon an equal footing, in consequence of their equal innocence or equal contribution to the cause of the disaster and loss, the fund should be distributed pro rata upon their several claims, as provided by the fifty-fifth rule in admiralty. Transportation Co. v. Wright, 13 Wall. 104, 122, 20 L. Ed. 585. In the case just cited it appeared that the steamer Norwich came into collision with the schooner Van Vleit, and that the schooner and her cargo were a total loss. The Norwich, which was solely at fault, availed herself of the benefit of the limited liability act. The Norwich herself sustained damage, and her cargo was lost. The owners of the schooner and her freight and the owners of the cargo on the Norwich, beiug equally innocent, were permitted to share pro rata in the fund which represented the value of the Norwich and her pending freight. Touching the claim of the libelants, the owners of the sunken schooner and her cargo, the court said:

“But the claim of the libelants alone is not alleged to be greater than the value of the steamer and her freight. The libelants, therefore, would be entitled to receive the whole amount of this damage, if they were the only persons who sustained damage, or if, by reason of the nature of their claim, their lien was superior to that of the owners of the cargo lost on the steamer. Liens for reparation for wrong done are superior to any prior liens for money borrowed, wages, pilotage, etc. But they stand on an equality with regard to each other if they arise from the same cause. We think, therefore, that the lien of the libelants for the loss of the schooner and her cargo, arising from the collision, is on an equality with the lien for the loss of the cargo of the steamer from the same cause. This being so, the ease for the application of the statute arises; for it is alleged by the libelants that the damage to the schooner and her cargo, together with the damage arising from the loss of the steamer’s cargo, greatly exceeds the value of the steamer and her freight for the voyage.”

The fifty-fifth rule preserves “to all parties any'priority to which they may be legally entitled.” In consequence of the supposed innocence of the owners of cargo lost on the Florida, they were awarded by the court below priority of payment out of the fund to be paid in by the owners of the Roby. The ground upon which the cargo owners were preferred by Judge Swan, who heard this cause in the district court, is thus stated by him:

“It is recognized equity, however, that the claim of an injured party wholly innocent of fault or dereliction resulting in a loss should be move favorably regarded than that of a creditor against the same fund whose negligence aided to cause the loss. Such a case would present an exception to the general rule of pro rata division among sufferers by a common disaster, and that rule should be limited to cases where all the parties seeking reparation are equally innocent of fault, unless statutory or judicial authority has otherwise determined.”

The soundness of this rule of distribution is not denied by the learned counsel representing the owners of the Florida as a general rule of equity, applicable in maritime cases prior to the enactment by the congress of the act qf February 13, 1893 (27 Stat. 445) generally known as the “Harter Act.” The contention is that the third section of the Harter act “places it beyond the power of the cargo to take the proceeds which would have gone to the hull» interests had the Florida been without cargo.” That section is in these words:

“Sec. 3. That if the owner of any vessel transporting merchandise or property to or from any port in the United States of America, shall exercise due diligence to make the said vessel in all respects seaworthy and properly manned, equipped and supplied, neither the vessel, her owner or owners, agent, or charterers shall become, or be responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel, nor shall be held liable for losses arising from dangers of the sea or .other navigable waters, acts of God, or public enemies, or the inherent defect, quality or vice of the thing carried, or from insufficiency of package, or seizure under legal process, or for loss resulting from any 'act or omission of the shipper or owner of the goods, his agent or representative or from saving or attempting to save life or property at sea, or from any deviation in rendering such service.”

The argument of counsel against any preference to the cargo interests is: That “if the Florida had been without cargo, her owners would receive their full half damage under the decree dividing damages as entered in the district court. * * * Being with cargo, if such cargo is given priority, and absorbs what would otherwise have gone to the hull, then, by such priority, the owners of the Florida shall become or be responsible for damages or loss resulting from fault or errors in navigation, or in the management of said vessel, in direct derogation of the statute.” In short, the contention is that the well-settled equitable rule which prefers an entirely innocent claimant upon a fund over another whose fault contributed to the common loss shall be set aside, because its operation will be to prevent a realization of the decree in favor of the Florida against the Roby. The equitable preference accorded the superior equity of the cargo owner in the fund from which all losses must bfe paid is wrongfully described as an indirect imposition of cargo liability contrary to the statutory exoneration intended. The trouble lies further back. But for the limited liability act, there would have been no occasion to call into operation the rule for distribution of a common fund insufficient to pay all. The question to be decided comes to this: Is the third section of the Harter act to be construed as operating to restrict the operation of general and well-settled principles of law beyond the plain and explicit relief afforded from their operation by the words of the statute? The Harter act has several • times been under consideration by the supreme court. In the case of The Delaware, 161 U. S. 459, 471, 474, 16 Sup. Ct. 516, 40 L. Ed. 771, it was sought to have the act construed as exonerating a vessel and its owners from all liability for a collision resulting from the fault and mismanagement of those responsible for her navigation. .This view of the act was rejected, the court, among other things, saying that “the whole object of the act is to modify the relations previously existing between the vessel and her cargo,” and that its “provisions have no possible application to the relation of one vessel to another.” In the case of The Irrawaddy, 171 U. S. 187, 18 Sup. Ct. 831, 43 L. Ed. 130, there was involved the question whether the owner of a seaworthy vessel, stranded through the negligence of her master, was entitled to a contribution in general average for sacrifices made and suffered in unsuccessful efforts to save the vessel and her cargo by reason of the exoneration of the vessel from liability to her cargo for the negligence ,of his master and crew. It was conceded that prior to the Harter act no such claim was admissible, if the stranding was due to faults of navigation. The contention was that as the Harter act had relieved the vessel and her owners from liability to the cargo owners when the loss was due to negligent navigation, that a right to contribution now existed notwithstanding the negligence of the master was the cause of the stranding. The court, in its opinion, said:

“We are unable to accept this view of the operation of the act of congress. Plainly,, the main purposes of the act were to relieve the shipowner from liability for latent defects, not discoverable by the utmost care and diligence, and, in event that he has exercised due diligence to make his vessel seaworthy, to exempt him and the ship from responsibility for damage or loss resulting from faults or errors in navigation or in the management of the vessel. But can we go further, and say that it was the intention of the act to allow the owner to share in the benefits of a general-average contribution .to meet losses occasioned by faults in the navigation and management of the ship? Doubtless, as the law stood before the iiassage of the act, the owner could not contract against his liability and that of his vessel for loss occasioned by negligence or fault in the officers and crew, because such a contract was held by the federal courts to be contrary to public policy, and, In this particular, the owners of American vessels were at a disadvantage as compared with the owners of foreign vessels, who can contract with shippers against any liability for negligence or fault on the part of the officers and crow. The inequality, of course, operated unfavorably on the American ship owner, and congress thought fit to remove the disadvantage, not by declaring that it should be competent for the owners of vessels to exempt themselves from liability for the faults of the master and crew by stipulations to that effect contained in bills of lading, but by enacting tlmt, if the owners exercised due diligence in making their ships seaworthy, and in duly manning and equipping them, there should he no liability for the navigation and management of the ships, however faulty. Although the foundation of the rule that forbade shipowners to contract for exemption from liability for negligence in their agents and employes was in the decisions of the courts that such contracts were against public policy, it was nevertheless competent for congress to make a change in the standard of duty, and it is plainly the duty of the courts to conform in their decision to the policy so declared. But we think that for the courts to declare, as a consequence of this legislation, that the shipowner is not only relieved from liability for the negligence of his servants, hut is entitled to share in a general average rendered necessary by that negligence, would be in the nature» 'of a legislative act. The act in question does, undoubtedly, modify the public policy as previously declared by the courts, but. if congress had intended to grant the further privilege now contended for, it would have expressed such, an intention in unmistakable terms. It is one thing to exonerate the ship and its owners from liability for the negligence of those who manage tlie vessel; it is another thing to authorize the shipowner to do what he could not do before, namely, share in the general average occasioned by the mismanagement of the master and crew.”

In the case of The Chattahoochee, decided by the circuit coitrt of appeals for the First circuit, and reported in 21 C. C. A. 162, 33 U. S. App. 510, 74 Fed. 899, the facts were that the steamer Chattahoochee collided with .the schooner Golden Rule. The owners of the schooner filed their libel in the district court in their' own behalf and in behalf of the officers and crew, and as bailees of her cargo, against the steamship Chattahoochee, to recover for the loss of the schooner and her cargo, and the personal effects of the master and crew, through the collision. The district court held both vessels at fault, and gave the libelants a decree for one-half the'valúe-of the vessel and the full value of the cargo, “with the usual right to recoup.” From this decree the libelants alone appealed. Judge Putnam, for the court, thus states one of the issues raised by the appeal:

“Both vessels being in fault, the district court, on the well-settled rule, allowed the steamer, which was not damaged, to recoup against one-lialf of the value of the. schooner and one-half of the value of the cargo, still leaving a net balance for which a decree was made in favor of the schooner,-her officers and crew, after fully satisfying and paying the loss to the cargo owners. In this way the schooner indirectly suffers the loss of one-half of the .value oif .the cargo, though it was by a diminution of the damages awarded her.”

She claims that this was in violation of section 3 of the' act of February 13, 1893 (27 Stat. 445, c. 105), commonly called the “Harter Act.” The court held, following the case of The Delaware, 161 U. S. 459, 16 Sup. Ct. 516, 40 L. Ed. 771, that the Harter act has no relation to the claim for the loss of the schooner herself, and furthermore said:

“The general purview of the statute limits it to the relations between a vessel and her owners and the cargo aboard and Its owners, and merely gives a statutory bill of lading, as was said partly in terms and partly in effect in Tlie Delaware. It has no proper relation to claims between colliding vessels or to the rustiemn judicium of the admiralty, which established the rule by which such claims are divided in case of mutual fault; or, consequently, to. the qualification of that rule by means of which the net damages are diminished by recoupment. The liability to which the statute appertains is that arising from a bill of lading, or other contract of carriage; while that, with which we are dealing comes from the relations of colliding vessels to each other, and is precisely the same as though the cargo lost had been the lading of a third vessel, involved in the collision, but in no way at fault.”

The court further held that the rule stated and applied in The North Star, 106 U. S. 17, 1 Sup. Ct. 41, 27 L. Ed. 91, was not affected by the .Harter act, that rule being that “in cases of collision occurring by the fault of both parties the entire damage to both ships is added together in one common mass, and equally divided between them, and thereupon arises a liability of one party to pay to the other such sum as is necesssary to equalize the burden.” The decree of the district court was affirmed in so far as the Chattahoochee had been allowed to set off the decree against her for one-half the value of the schooner by one-half of the decree for cargo damages. This case was taken to the supreme court on writ of certiorari, where the decree of the court of appeals was affirmed, the opinion being by Mr. Justice Brown, and reported in 173 U. S. 540, 552, 19 Sup. Ct. 491, 43 L. Ed. 801. The argument in behalf of the owners of the sunken schooner against the right of the Chattahoochee to set off her liability for one-half the value of the schooner by one-half the decree against her for cargo damages was precisely the argument now made to avoid the application of the rule of priority which gives preference to the claims of innocent cargo owners over 'the claims of the vessel owners whose vessel had contributed to the collision. Thus (at page 552, 173 U. S., pages 495, 496, 19 Sup. Ct., and page 807, 43 L. Ed.) Justice Brown states that the contention was that— ,

“Tlie exemptions of (be Harter act are not intended for the benefit of the steamship or any other vessel by whose negligence n collision has occurred, hut for the benefit of the carrying vessel alone; and, if she be held liable in this indirect manner for a moiety of the damages suffered by the cargo, the act is to that extent disregarded and nullified. That the amount which is paid by recoupment from the just claim of the schooner against the steam.ship is paid as effectually as it would be by a direct action by the owners of the cargo against the schooner.” ,

This the court answered by saying:

“But if the doctrine of the Xorth Star, he a sound one, that in Cases’of mutual fault the owner of a vessel which, lias been totally lost by‘Collision is not entitled to the benefit of an act limiting his liability to the other vessel until, after the balance of damage has been struck, it would seem to follow that the sunken vessel is not entitled to the benefit of any statute tending to lessen its liability to the other vessel, or to an increase of the burden of such other vessel, until the amount of such liability has been .fixed upon the principle of an equal division of damages. This is in effect extending the doctrine of the Delaware Case, wherein the question of liability for the loss of the cargo was not in issue, to one where the vessel suffering the greater injury is also the carrier of a cargo. In other words, if the .'Harter act was not intended to increase the liability of one vessel towards the other in a collision case, the relations of the two colliding vessels to each other remain unaffected by this act, notwithstanding one or both of such vessels be laden with a cargo. We are therefore of opinion that the court of appeals did not err in deducting half the value of the cargo from half the value of the sunken schooner, and in limiting a recovery' to the difference ' between these values. The decree is affirmed.”

It may be conceded that the precise question here presented did not arise in the case of The Chattahoochee, nor in any other case to which we have been referred. The opinion and decree in the Chattahoochee Case would, however, require that the Roby should have the right to set off against the decree in favor of the Florida ■for one-half the value of that vessel and her freight one-half of the decree against the Roby for cargo losses, and that the decree in favor of the owners of the Florida, in their own right, against the Roby, should be for the difference between the two sums only. If that were done, the matter would stand thus:

Amount of tbe decree against the Eoby in favor of the British & ■ Foreign Insurance Co., underwriters on cargo.................§65,205 33

Amount of decree in favor of tbe owners of tbe Florida as bailees for cargo unrepresented by tbe intervening underwriters...... 6,02.6 71

Total of decree for cargo damages against tbe Eoby......§71,322 04

.Amount of tbe decree against Eoby for one-balf value of tbe ■ Florida ..................................................... §45,590 56

Amount of decree for one-balf value of effects of crew of Florida 1,462 79

§47,059 35

Deduct one-half of tbe decree against tbe Eoby for cargo damages 35,661 02

Net decree in favor of tbe Florida...........t...........§11,398 33

But the appraised value of the Roby is less than the decree for . cargo damages, and this at once raises the question as to whether the claims must be paid pro rata or the cargo claim before the net 1 amount due to the Florida. From the interpretation placed upon the Harter act in the cases we have cited we deduce the conclusion that that act is not to be construed as affecting the operation of the equitable rule which postpones the claims of one whose fault contributed to the common loss as against the claims of innocent cargo owners. In the -case of The Irrawaddy, already cited, Mr. Justice Shiras, in announcing the opinion of the court touching the meaning and effect of the Harter act, said:

“Upon tbe whole, we think that in determining the effect of this statute in restricting tbe operation of general and well-settled" principles our proper course is to treat those principles as still existing, and to limit the relief from their operation afforded by the statute to that called for by the language itself of the statute.”

5. For the owners of the Florida it is next urged that, aside from th§ effect of the Harter act in exonerating the Florida from cargo liability, her bills of lading contain stipulations exempting her from liability for cargo lost as a result of collision, and that certain of her bills of lading also provide that any carrier by water, “liable on account of loss or damage,” on account of the property shipped thereunder, “shall have full benefit of any insurance that may have been effected upon or on account of said property.” Neither one of these stipulations has any bearing upon any question here presented. Neither cargo owners nor cargo underwriters are endeavoring to hold the Florida liable for cargo losses. The right of recoupment, which we hold to exist in favor of the Roby, by which one-half of the decree against her for cargo lost on the Florida has been set off against the decree against the Roby for one-half the value of the Florida, does not depend upon the liability of the Florida for cargo damages, but rests upon the liability of the two colliding vessels to bear equally the burden resulting from a collision due to their mutual fault. In other words the right of recoupment does, not depend upon the relation of the carrying vessel to her cargo, but upon the relation of the colliding vessels to each other. Neither does the postponement of the balance due to the owners of the Florida, after re.coupment, rest upon the liability of the Florida to cargo owners, but upon the general equitable principle that where the fund out of which the losses are to be paid is insufficient to pay the demands of all of the claimants, the claim of an innocent cargo owner shall be preferred over ihe claim of one whose fault contributed to the common disaster. In the last analysis the decree in favor of the Florida owners is ineffective, because, under the limited liability act, the fund for the payment of the Roby liabilities is not sufficient to pay both classes of claims. To say that the preference given to the cargo liability operates indirectly to make the Florida liable to cargo owners, contrary to the terms of the Harter act, and to deprive her of the benefit of her bill of lading stipulations for exemption from liability for cargo lost by a collision, as well as from the benefit of insurance taken on cargo by shippers, is to say no more than was said by the hull interests in the Cases of the Irrawaddy and Chattahoochee, already cited. The answer to the objection now under consideration is that the Florida has not been held liable to careo owners, and, therefore, the bill of lading stipulations have not come into effect.

6. One other question remains for decision. The district court disallowed interest upon the bond given for the release of the Roby. The Roby was appraised at $59,300, and a bond with security executed for that amount, by which the owners of the Roby and their surety bound themselves, “in the sum of $59,300, unto whom it may concern, that the said Lakeland Transportation Company shall abide and answer the decree of the court in said matter, and shall pay into--the registry of the court said $59,300, and the interest on the same,-as provided by law, the appraisal value of the said steamer, whenever such payment shall be ordered and required by the court.” The. district court had undoubted authority to require that the owners of the Roby, as a condition of the release of their vessel, should enter into a stipulation to pay the appraised value, either with or without interest, when ordered. The authority for the release of a libeled vessel, or for a vessel surrendered upon an application for the benefit of the limited liability act, is found in the fifty-fourth admiralty rule. Under that rule the owners of a vessel seeking the benefit of the limited liability statute, might convey their vessel to a trustee to be named by the court, or the court might appraise the vessel and require the value to be paid at once into court, or release the vessel upon a stipulation to pay the appraised value into court when ordered. If the appraised value had been at once paid into court the fund might have been made productive by lending it out at interest or by investing in approved bonds. In such case the fund for ultimate distribution would have been enlarged. As such a course was open to the court it is clear that it might, as a condition of release upon bond, require that the stipulators’ bond should bear interest from date. The Wanata, 95 U. S. 600, 24 L. Ed. 461; In re Harris, 6 C. C. A. 320, 57 Fed. 243. In The Favorite (D. C.) 12 Fed. 213, Judge Blodgett held that the owners might, irrespective of any prior order or stipulation, be required to pay interest upon the -value of the Vessel from the date of collision, the decree going against the owners and their surety in' the stipulation for the value only, there being no provision binding the surety to pay interest before default. Where the stipulators defend the suit it is not unusual to charge them with interest from the date of the filing of the bond, upon the ground that they are responsible for the delays incident to the defense made. The Maggie M. (D. C.) 33 Fed. 591; The Wanata, 95 U. S. 612, 24 L. Ed. 461; The Maggie J. Smith, 123 U. S. 356, 8 Sup. Ct. 159, 31 L. Ed. 175. The question here arises upon the bond actually given and the liability of the makers of the bond.,. The liability of stipulators in a bond is limited to the amount therein named, and, if the stipulation does not bear interest, they are only bound for interest in case they make default in paying according to the terms of the obligation. The Wanata, 95 U. S. 600, 24 L. Ed. 461. Here the stipulation is that they shall pay “said $59,300, and the interest on the same, as provided by law.” Do the words; “and the interest on the same, as provided by law,” imply an agreement to pay interest from the date of the obligation? The words used in the obligation must determine the rights of the parties. What did the stipulators mean by agreeing to pay the principal sum “and the interest on the same, as provided by law,” if they did not mean to pay interest at the rate provided by law for like contracts from the date of -the agreement? By the execution of this obligation the owners obtained the use of their vessel. Their liability was for the value of the vessel at the time of the collision. Why shall they be allowed, the use of-that value 'during a protracted. •litigation carried on by themselves ?' The justice oí the matter was that the value at date of collision should be made productive. An agreement to pay that value “and the interest on the same, as provided by law,’- can have no reasonable meaning attached to it unless it implies an agreement to pay interest, at the rate provided by law, upon the principal sum from the date of the agreement. It may lie that' the words used are somewhat ambiguous. But any ambiguity in such an obligation is to be construed against the makers of the instrument. 2 Pars. Notes & B. 392; Brandt, Sur. (2d It'd.) £ 92. Unless these words are construed as an agreement to pay the lenal rate of interest from the date of its execution, the language is idle, for without them the stipulators would be liable for interest from the time of its maturity, which would be the time when the court should order payment. We think the district court erred in not ordering the payment of interest at the rate allowed by the law of Michigan from the date of this obligation. In this respect the decree of the court below must be modified. In other respects the decree is substantially affirmed. Peter P. Miller and others will pay one-half of all the costs, and the Lakeland Transportation Company will pay the remainder.

Case Details

Case Name: The George W. Roby

Court Name: Court of Appeals for the Sixth Circuit

Date Published: Oct 8, 1901

Citation: 111 F. 601

Docket Number: Nos. 914-916

Court Abbreviation: 6th Cir.