*1 MUTUAL ATLANTIC STATES UNITED CO. INSURANCE al. et 21, 1952. April 7, 1952. Decided Argued March No. *2 James L. Morrisson argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney Baldridge, General Samuel Slade, D. Roscoe H. Hupper Ray and Rood Allen. Leonard J. Matteson argued the cause for the Farr Sugar Corporation et al., respondents. With him on the brief were Oscar R. Houston and Richard F. Shaw. Keating,
Cletus Edwin S. Murphy and Louis J. Gus- mano submitted on brief for Belgian the Overseas Trans- port, A., respondent. S.
Mr. Justice Black delivered opinion the of the Court. Respondents cargo are owners1 shipped who goods on the steamship Nathaniel Bacon by owned petitioner, the States, operated United and as a common carrier goods for hire. It collided with Belgium the Esso and respond- ents’ cargo was damaged. The ships were damaged. also This litigation was brought in the District Court to deter- mine liability for the damages suffered cargo the own- ers the physical damage caused the ships. It was agreed in the District Court that:
(a) The collision was due to negligent navigation by employees of both ships. cargo owners were in no way at fault.
(b) Belgium, as one of joint two tortfeasors, pay must of damages suffered the Bacon’s “100%” cargo owners. companies Certain insurance parties are to this subrogees suit as
of their cargo insured owners. cargo Some owners were not insured. 4 (2) § Act2 the § Because
(c) cargo own- Act,3 by Sea Carriage of Goods cargo Bacon suing directly from barred ers are damages. fault, mutually were ships two Since
(d) be shared should to both damages of all aggregate by both.4 caused damages aggregate computing In
(e) cargo taken of account should ships, both Belgium by recovered damages owners. Bacon by the issued lading bill of
(f)
clause.5
“Both-to-Blame”
contained
owners
owners
requires
valid,
clause,
This
*3
the
any amounts
Bacon for
the carrier
indemnify
2
provides that
section
192. This
S. C.
46 U.
27 Stat.
§
ship
making the
shipowner in
by the
exercised
diligence is
due
supplied,
then
manned, equipped, and
seaworthy
properly
charterers,
owners, agent,
shall
or
vessel,
owner or
her
the
“neither
resulting from
damage
faults
or loss
responsible for
or be held
become
vessel
management of said
navigation or in the
or errors in
3
provides
(2). This section
C.
1304
U. S.
49
46
§
Stat.
responsible for loss
ship
shall
nor
the
the
carrier
“Neither
Act, neglect, or default
(a)
resulting
arising
damage
or
or
from —
carrier in the
of the
mariner, pilot,
the servants
master,
or
of the
ship;
.”
management of the
. . .
navigation
in the
or
Belgium,
Esso
in
case the
stipulated that
this
shipowners
have
of the
one-third
total
Bacon
and the Nathaniel
two-thirds
is to bear
equal
admiralty
requires an
divi
although
normal
rule
damages,
the
Ship Corp., 342 U. S.
Halcyon
v. Haenn
damages.
Lines
of
sion
282, 284.
follows:
reads
as
clause
ship as a result
into
with another
collision
“If the
comes
neglect
default
any act,
or
ship and
negligence of
other
the
navi-
the Carrier
mariner, pilot or
servants of
Master,
goods
ship, the owners
management
gation or in the
lia-
against all loss or
indemnify the Carrier
will
carried hereunder
far as
so
such
non-carrying ship or
owners in
her
bility
or
to the other
to,
any claim what-
damage
or
of, or
loss
liability represents
or
loss
Bacon loses because damages
recovered
Belgium
owners from the
are included in
aggre-
gate damages divided between the
ships.
two
only
question presented to us is whether the “Both-
to-Blame” clause is
Respondent
valid.
cargo owners con-
tend that it is void and unenforceable as a violation of the
long-standing rule of law which forbids common carriers
from stipulating against
the consequences of their own
employees’
their
negligence. Petitioner,
the United
States, contends that
3 of
§
Act,
as substan-
tially
reenacted
4 (2)
§
Goods
Sea
Act, provides special statutory authorization permitting
ocean carriers to deviate from
general
rule
to stip-
ulate
their negligence
as
did here. The Dis-
trict Court held the clause valid.
There is rule of law that common carriers stipulate cannot immunity their own or their agents’ negligence. While general this rule was fashioned by the courts, it has been continuously accepted a guide as to common-carrier relationships more than a century6 and has acquired the precision force and of a legislative enactment. Considering the relationship of the rule the Harter Act, this Court said “in view *4 soever of the goods, owners of said paid payable by or the other or non-carrying ship or her owners to goods the owners of said and set- off, recouped or recovered the or non-carrying ship other or her part'of owners against as their claim carrying ship the or Carrier.” 6See, g., Liverpool e. Co., Steam Co. 397, v. Phenix Ins. 129 U. S. (1889); Botany 438-444 Knott v. Mills, 179 69, (1900); U. S. 71 Lockwood, Railroad Co. v. 17 (1873); Wall. 357 Boston & Maine R. Piper, Co. v. 439, 246 U. (1918); Giorgio S. 445 San I v. Rheinstrom Co., 494, (1935). 496 And see cases collected 9 Am. Jur. 874-877. time at the rule general of the nature the well-settled
of legislative that result it must adopted, was the statute general to the given implication by clear approval changed.” not it was all cases where existing in rule as then question Our 263, 268-269. S. Kensington, 183 U. The Act, sub- Harter language is whether therefore Act, by Sea Goods Carriage of in the stantially reenacted general to exception statutory special out a has carved owners cargo deprive to carrier permit a as to rule so ain obtain judgment any fruits of part contributes noncarrying vessel against a action direct to a collision. cargo in 1893, Act the Harter passage to the
Prior could collision in a both-to-blame damages incurred Atlas, 93 S. The U. ship. full from either recovered circumstances, took under some Act, Harter The own carrier to sue his cargo owner right away the navigation negligent by the damages caused deprive It did not agents. or servants the carrier’s noncarrying action his owner of tort Nor Chattahoochee, 549-550. 540, S.U. ship. The insulate the carrier so far as go Harter Act to did the damages physical vessel another responsibility of the carrier’s navigation ship by negligent caused Delaware, 471, 459, S. U. agents. In servants Act the Harter such give declined this Court itself, the language interpretation though even broad would have alone, and considered “broadly construed” addition, In interpretation. an justified such obligation from its the carrier not exonerate Act does paid by damages one-half the noncarrier share with Chattahoochee, to the owners. noncarrier Aktslsk. Cuzco 551-552; see also supra, pp. Sucarseco, 401-402. S.U. after the forty years until it was about
Apparently first shipowners attempted the Harter Act passage of *5 by stipulation cargo of a deprive part owners their re- Bruce, covery against noncarrying ships. See W. W. 14 F. Supp. 894, rev’d on other 94 F. 2d grounds, 834. present shipowners effort of appears date from 1937 when the North Atlantic Freight adopted Conference the “Both-to-Blame” clause.7 So far as appears, this is the first test of the legality the clause that has appeared in the courts. Congress passed When Goods in 1936, Sea Act purpose bring indicated no about a change in the long-existing relationships and ob- ligations between shippers carriers and which would be relevant to the validity of the “Both-to-Blame” clause. At that time all groups interested such as owners, shipowners, and the representatives of interested insur- companies ance were before the congressional committees.8 Although petitioner respondents appear both to find comfort language and the hearings the 1936 Act, nothing either persuades Congress us that intended to alter the Harter Act any respect material to this controversy.
Petitioner argues that the clause does nothing more than remove an “anomaly” which arises from this Court’s construction of the Harter Act. It is said to be “anom- alous” to hold a carrier not liable at all if it alone guilty is of negligent navigation but at the same time to hold it indirectly liable for one-half damages if another ship is jointly negligent with it. Assuming for the mo- ment that all rules of law must be symmetrical, we think it would be “anomalous” to hold that a who owner, has an unquestioned right under the law to recover full damages from a noncarrying vessel, can be compelled to 7Robinson, Admiralty, 872, 873; Knauth, Ocean Lading Bills of (3d 1947), 95, 136, ed. 8 Hearings before Senate Committee on Commerce on S. 74th Cong., 1st Sess. *6 of because his carrier recovery to of that a up portion
give Moreover, there lading. a bill of exacted stipulation a the Act or the Harter either that indication nois long-estab- the alter to designed Act by Sea of Goods by sustained losses of the burden full the rule that lished be shared is to collision in a both-to-blame ships both of bill exacting this of very purpose the Yet equally. equal its escape to ship one is to enable stipulation lading to burden its a of part shifting by losses of such share owners. considera- legislative think that more, “we Here, once fair accommoda- a bring about can best and action tion varied of the interests” related but of the diverse tion to carriers permitting be affected would who groups congres- that without controlling rule deviate own their stipulate cannot authority they sional that If or agents servants. of their that or negligence shipowners, not the Congress, changed, is to be rule it.10 change should
Affirmed. Burton Frankfurter, Mr. Justice whom Justice Mr. dissenting. joins, a unanimous reversed this Court a weeks
Only ago few Fourth Circuit Appeals of the Court opinion agreements policy, public opposed had held which portion turned over eyeglasses whereby retailers 282, 286. Ship Halcyon Corp., 342 U. S. Lines Haenn lading bill of argument this have not overlooked We holding opin and Court’s upheld because of this stipulation should upheld stipulation case Jason, 32. The Jason ion in general should contribute shipowner and owner both necessarily expenses incurred average of sacrifices on account whole. preserve the as a in order master of average “was sustained because Moreover, general clause this only average in circum- general shipowner share in admitted the referred oculist who to the price purchase approval no doing, “we voice In so to them. [d] customer in the involved” policy public business ethics Commissioner, 343 U. S. Lilly v. agreements. into the right private our views to make refusal
This in- has affairs men of activities legal standards vague our decisions creasingly characterized unenforceable challenged as agreements area of shifting legally to be deemed must be offensive what because indication plain of a the absence “In controlling policy. govern- through long policy public] of that [dominant *7 of violations enactments, or- statutory or practice mental should Court standards, this or moral of obvious ethical Department of the War contracts to declare assume States, v. Muschany United contrary public policy.” to justification more unrestrained 66-67. No 49, 324 S.U. agree- business private down warrants courts strike before standard, agreements Judged by such ments. be enforced. us should the ob- passed, was Harter Act1 1893, when the
Before passengers respect with seagoing carriers ligations of of in the exercise by this Court cargo were defined from ease to case. admiralty jurisdiction and maritime its of an in the relation carrier stood ocean Toward act of by save caused any damage liable for insurer, highest care. duty it owed the passengers and to God; thought mark to this Only by holding carriers responsibility.” from by Act he was relieved where the Harter stances Sucarseco, 394, Here the 294 S. v. The U. Cuzco Aktslsk. negligence responsibility for attempted itself from shipowner relieve damages another with inflicted on employees in connection by relieved the Harter Act he was where [not] —“circumstances responsibility.” from 1 super 13, 1893, 445. The has now been of Feb. 27 Stat. Act Act by 1936, 1207, by Sea Act of Stat. seded Goods seq., any changes et but are not relevant S. C. U. § issues here involved. imposi- and undue be achieved
safety operation could tion eliminated. by carriers special obligations by sought to avoid these
The carriers relieving them lading, stipulations bills of contracts rules laid under the would incur liabilities which agreements. in the absence of such by down the courts efforts, they re upheld some such Although courts exemp to refuse to enforce contractual right served the notions liability upon judicial which trenched tions thus important The most limit set public policy.2 of the carrier to contract out of his common- power to the rule that courts would strike down liability law was the the carrier for hire from any stipulation which relieved negligence. Ap its own liability damage caused v. railroads, Railroad Co. by this Court to plied first Lockwood, was extended to car 17 Wall. the doctrine Liverpool later in years sea few & Great Western riers Co., 397. Underlying v. Phenix Ins. Steam Co. an premise agreement, was the that such the decision enforced, vigilance would tend to relax the care seamanship liability encouraged. which the threat of See Lockwood, supra, 377-378. Railroad Co. process by body exceptions which this of rules and *8 developed typical growth judge-made was is of the law in in system. legislative guidance, judges our Without deciding are thrown their own re- necessarily upon cases in ascertaining public policy applicable sources particular situations.
2 upon The courts based this reservation the observation that such agreements. shipper contracts were not in fact consensual had accept See, g., little choice but to the carriers’ terms. e. Railroad Lockwood, 357, 379; Liverpool v. Co. 17 Wall. & Great Western Co., 397, Steam Co. v. Phenix Ins. 441. This circumstance necessarily agreement, many did stipulations void the since were upheld. provided justification refusing But it to enforce those judicially pronounced public policy. which offended judge’s responsibility function and become other- legislature public policy. wise once the has formulated Courts are no out longer large. They carry then must policy disregard the defined their own determination public good City what the Twin demands. See Co. v. Co., Harding By Glass S. the Harter Act, U. Congress supplanted judicial public policy view of with its own ideas. The legislation, as is so often the case, represents compromise among competing interests. The carriers were relieved of their judicially imposed In liability. insurers’ return were required forego possibility avoiding by contract certain specified obligations. Finally, obligations those in were fact performed,3 recovery against damages the carrier for cargo due to faulty navigation was altogether disallowed. provision, This embodied Act,4 § nec- essarily expressed rejection of the judicially conceived premise as to public policy which was the foundation of the decisions which antedated legislation, namely, liability for negligent navigation necessary was a spur to the carrier’s exercise of care. premise Since that has been discarded by Congress, justification no remains for us to revive as a basis for striking agree- down the ment here question. Legislature “The has power to decide what the policy of the law shall be, and if it has will, intimated its however indirectly, that will should recognized and obeyed. major premise of the expressed conclusion in a statute, change policy that induces the enactment, may not be set out terms, but it is not an adequate discharge of duty for courts say: We you see what are driving at, but you have not said it, and therefore we go shall on as before.” John- proviso This eliminated of Goods Sea Act of 1207, 1210, 49 Stat. 46 U. S. C. 1304. § 427 Stat. 445. *9 J.); Holmes, (per States, F.
son v. United in Harvard Law, the Sources and Landis, Statutes see Essays, Legal prescribe in terms did not Harter Act sure,
To be over recovery should have that the carrier ship, non-carrying liability to a for the amount by the non-carrier made payments attributable were both vessels for which in a collision damage to Chattahoochee, 173 S.U. held in Hence we to blame. a carrier was available to recovery that no such period in and same Similarly, of the Act. mere force that, held Act, we the Harter passage shortly after par- that the carrier should specify the Act did since to which peril when the average5 general in a ticipate navigation, faulty result of the carrier’s was the it related had not if the carrier be had participation could no such But Irrawaddy, 171 S. 187. it. The U. stipulated participation, for such did contract when a carrier to sustain this Court required- Harter Act force of the Jason, 225 S. 32. U. stipulation. agree- and merely sanctioning covenants “Instead Con- shipowner’s] liability, limiting ments [the agreements further and rendered such gress went declaring liability itself, unnecessary by repealing diligence due should exercise shipowner seaworthy, prop- respects the vessel all to make supplied, neither ves- erly manned, equipped provides average general is a of maritime law which doctrine residue portion of is sacrificed to save the that where a property peril shipwreck, each owner of contributes saved property up the loss proportion value of to make to the property sacrificed for the benefit. of those has been common whose power Barr Ames’s of fertile It was characteristic of Dean James average generalization general doctrine of to find the maritime principle comprehensive quasi-contractual manifestation of the more against unjust enrichment. *10 etc., her owner or should be
sel, owners, responsible damage resulting for or loss from faults or errors navigation management etc., of the vessel, noting. says etc. The antithesis is worth Congress to the shipowner respects you certain shall —Tn from responsibilities relieved incident to your public occupation as a carrier, although common agree owners shall be you relieved; cer- tain respects (provided other fulfill you conditions specified) you shall be relieved from responsibility, even stipulation without a from the owners of ” Jason, cargo.’ supra, at 50-51.
“In our so far opinion, as the Harter Act has re- shipowner lieved the responsibility from for neg- ligence of his master and it crew, longer against is no policy him the law for to contract with the cargo-owners for a participation in general average contribution growing out of such . .” negligence; . . Id., at 55. present case bears exactly the same relation to The
Chattahoochee that The Jason bore to The Irrawaddy. To revive notions of public policy Congress which re- jected in 1893, disregards the appropriate considerations governed application of the Harter inAct the earlier decisions.6 To derive from a statute, which relieves Reliance Kensington, Court on is U. S. surely misplaced, quotation and the put from it must be in its setting. That was recovery a case in sought damage which was for passenger’s baggage, to a although the stipulation ticket contained a against liability. the carrier’s The Court noted that the Harter Act immunity liability from negligence applied for only to vessels “when engaged in the carriage coming classes of within the terms of the Id., statute.” deciding 268. Without passengers’ baggage whether was such a carriage, class of stipulation Court struck down the ground that, on the applied, agreement the Harter Act void as violative of sought the Act in immunity that it negligent wholly is ship cargo when liability entirely
ship restriction implied an loss, to blame when the liability for relief arrangement voluntary to which an odd use surely blame, is half to only is a rule fashion does this Court When such a statute. put illogical perverse to be less ought policy public that in its operation. than meaning that the real however, suggested,
It is *11 Congress for to are carriers remitted Harter Act is that That is a granted. to be immunities were whatever legislation, take of to most doctrinaire view Congress What of the notion.7 Jason, supra, disposes between relations about the legislate generally to did was Generally, but in commerce. seagoing carrier and a maritime it formulated though as comprehensively not arrangements within the excluding all consensual code pas- carriage of by Act; if the specifically stowage, forbidden liability exempted among baggage the classes sengers’ was not voiding stipulations with course, such Act, the cases then of Certainly baggage force. a decision affirm- respect their to retained goods baggage, applicability of cases as to ing these the continued liability negligence, Congress for withdrawn carrier for which has not totally stowage, inapposite any negligent is to event and in applied cargo, to question pre-existing case law should whether liability. immunity granted from such Congress has the carrier where not, argument to be drawn from appears if it But even did reality Congress had, It would have basis the blue. pre-existing outlawing Act, exception rule carved from a Harter an regarding liability. shipper agreements and carrier all between general prohibition continue in force because the Harter Act would defined, qualification. But there was no would have been a limited statutory. Congress rule, judge-made or had such either taken no agreements generally. And this did not outlaw such action. Court grounded specific agreements specific It down reasons struck public policy. premise policy was denied in its view That suggest validity by Act. It smacks fanciful really Congress proviso existing that what did was to raise an a premise. absolute rule based on that industry. That legislation require “indicate as [s] [s] justification a change policy law, although it expresses that change only specific in the cases most States, Johnson United likely occur to the mind.” v. supra, We should heed the admonition of Mr. Justice Holmes “that in dealing courts with statutes some- times have been slow to recognize too that statutes even when in covering only terms particular may imply cases policy different from that of the common law, and there- fore may exclude reference the common law for the limiting their scope.” Panama R. Co. purpose Rock, (Holmes, J., 215-216 with Taft, J.,C. McKenna and Brandéis, JJ., dissenting). This is such a I statute. would recognize that Congressional pro- nouncement of public policy it exempted carriers —when from liability for faulty navigation precludes our strik- — ing down the clause here issue.