Liverpool & Great Western Steam Co. v. Phenix Ins. Co.
129 U.S. 397 (1889)

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U.S. Supreme Court

Liverpool & Great Western Steam Co. v. Phenix Ins. Co., 129 U.S. 397 (1889)

Liverpool and Great Western Steam Company v. Phenix Insurance Company

Argued November 8-9, 1881

Decided March 5, 1889

129 U.S. 397

APPEAL FROM THE CIRCUIT COURT OF THE UNITED

STATES FOR THE EASTERN DISTRICT OF NEW YORK

Syllabus

A decree of the circuit court in admiralty on the instance side, finding negligence in the stranding of a ship, can be reviewed by this Court so far only as it involves a question of law.

The owner of a general ship carrying goods for hire on an ocean voyage is a common carrier.

A common carrier by sea cannot, by any stipulation with a shipper of goods, exempt himself from all responsibility for loss or damage by perils of the sea arising from negligence of the officers or crew.

Upon a question of the effect of a stipulation exempting a common carrier from responsibility for negligence of his servants, the courts of the United States are not bound by decisions of the courts of the state in which the contract is made.

The general maritime law is in force in this country so far only as it has been adopted by the laws or usages thereof.

The law of Great Britain since the Declaration of Independence is a foreign law, of which a court of the United States cannot take notice unless it is pleaded and proved.

The law of the place where a contract is made governs its nature, obligation, and interpretation unless it appears that the parties, when entering into the contract, intended to be bound by the law of some other country.

A contract of affreightment made in an American port by an American shipper with an English steamship company doing business there for the shipment of goods there and their carriage to and delivery in England, where the freight is payable in English currency, is an American contract, and governed by American law so far as regards the effect of a stipulation exempting the company from responsibility for the negligence of its servants in the course of the voyage.

An insurer of goods, upon paying to the assured the amount of a loss, total or partial, becomes, without any formal assignment, or any express stipulation to that effect in the policy, subrogated in a corresponding amount to the assured's right of action against the carrier, and may assert that right in his own name in a court of admiralty.

In a through bill of lading for carriage from an inland city in the United States, by a railroad company and its connections, and a steamship company to an English port, signed by an agent of the companies "severally, but not jointly" and containing two separate and distinct sets of

Page 129 U. S. 398

terms and conditions, the one relating to the land carriage and the other to the ocean transportation, a stipulation, inserted in the first set only, that in case of loss, that company alone shall be answerable in whose actual custody the goods are at the time, "and the carrier so liable shall have the full benefit of any insurance effected upon the goods," gives the steamship company no right to the benefit of any insurance.

This was a libel in admiralty in personam "in a cause of action arising from breach of contract," filed January 27, 1881, in the district court against the Liverpool and Great Western Steam Company (Limited) by the Phenix Insurance Company, claiming to have been subrogated to the rights of the owners of goods shipped on board the respondent's steamer, the Montana, at New York, to be delivered at Liverpool, and lost or damaged by her stranding in the course of her voyage through the negligence of those in charge of her navigation. The libel contained the following allegations

First. The libellant was a corporation duly organized under the laws of the New York for transacting business as insurer, among other things, of maritime risks and adventures, and the respondent was a corporation duly organized under the laws of Great Britain and Ireland for the purpose of owning and navigating steamships and carrying passengers and cargo.

Second. The respondent maintained a line of steamers running between New York and Liverpool, and was a common carrier of passengers and cargo between those ports. The Montana was a steamer owned and navigated by the respondent as one of that line, and on March 2, 1880, left the port of New York with a cargo of merchandise and a large number of passengers received on board by the respondent as a common carrier, to be landed and delivered at Liverpool.

Third. Among such cargo were a lot of bales of cotton, variously marked, all shipped by or on account of Swanson, Porteous & Co., to their own order, and a lot of bales of cotton, variously marked, all shipped by or on account of Hobart, Smith & Co., to their own order, and 22 boxes of bacon and 4 tierces of hams, shipped by or on account of A. Baxter, agent, to his own order, all of which goods were shipped on board

Page 129 U. S. 399

the Montana in good order and condition, and the respondent agreed to deliver the same in like good order and condition at Liverpool.

Fourth. The Montana failed to deliver her cargo or any portion of the same as agreed, but, during the prosecution of her voyage from New York to Liverpool, stranded on the west coast of Great Britain at or near Clegyr Point, in Holyhead Bay, and thereby these goods became in large measure lost or destroyed and the remainder greatly damaged.

Fifth. This article set forth particularly the circumstances preceding and attending the stranding.

Sixth. The libellant charges that the stranding of the steamer and the consequent loss and damage of the cargo were due to the negligence of those navigating the steamer in proceeding at too high a rate of speed, in not having a sufficient lookout, in going upon an improper and dangerous course, in not making due allowance for the influence of the ebb tide, in not having or in not using and properly using the outfit and appurtenances -- among other things, the lead and compass -- and in not so heeding the shore lights and signals as would have indicated to them her dangerous position, and would have enabled them to regain and keep in a position of safety.

Seventh. The libellant, before the stranding, had made insurances on the goods in sums equal to or less than their value, to persons having an interest in them respectively equal to or greater than the sums insured, and under such insurances had paid, or become liable to pay, to the assured, for the loss or damage of the goods, sums amounting to more than $15,000. The damages of the assured or their assigns for the loss of the goods were greater than the amount of the insurances. And the libellant was subrogated to all their rights against the respondent for its failure to carry and deliver the goods.

The respondent filed an answer, alleging that it had duly appeared in the cause; admitting the jurisdiction of the court, as well as that the respondent was a British corporation for the purpose of owning and navigating steamers, and of carrying passengers and cargo, and since 1866 had been the owner

Page 129 U. S. 400

of certain steamers, plying between New York and Liverpool, and the Montana was a steamer owned and navigated by it, but denying that it was a common carrier, and alleging that the home port of the Montana was at Liverpool, where she was registered, and where the respondent carried on its business, having an agency, however, in the port of New York.

The answer alleged that the goods were shipped and received on board the Montana under bills of lading, which constituted the contracts between the shippers and the respondent, copies of which were annexed to and made parts of the answer -- namely, one for the bacon and hams, weighing nearly six tons, which is printed in the margin, [Footnote 1] and three for the cotton, amounting

Page 129 U. S. 401

in all to 550 bales and weighing about 123 tons, of which bills one is also printed in the margin [Footnote 2] and the others were

Page 129 U. S. 402

substantially similar; that the respondent assumed no greater risks or responsibilities than were expressed in the bills of lading,

Page 129 U. S. 403

and that the goods were lost or damaged by perils of the sea and by causes from which the respondent was exempt by law and by the bills of lading.

The answer denied any negligence on the part of those navigating the Montana, as charged in the libel, set forth particularly

Page 129 U. S. 404

the circumstances preceding and attending the stranding, and alleged that in respect to the employment of a skilled and licensed master and officers and the careful observation by them of the elements and everything which would, in the exercise of ordinary human skill, enable them to determine and judge the position of the vessel and to navigate her accordingly, and in respect to her seaworthiness and outfit and everything within the reasonable limits of skill and foresight, the respondent fully complied with its contract of affreightment, and with all the requirements of law.

As to the allegations of the libel concerning insurance and subrogation, the answer averred that the respondent had no knowledge, and left them to be proved.

In the District Court, the pleadings and depositions were read in November, 1882, the cause was argued and submitted May 4, 1883, an opinion in favor of the libellant was delivered June 29, 1883, which is reported in 17 F. 377, and a final decree for the libellant for the sum of $13,257.64, with interest and costs, was entered February 19, 1884.

The respondent appealed to the circuit court, where the cause was heard and argued July 1 and 2, 1884, upon the testimony taken in the district court, and on July 31, 1884, the court rendered an opinion in favor of the libellant, and filed its findings of fact and conclusions of law, all of which are reported in 22 Blatchford, 372. The findings of fact were as follows:

"The respondent, The Liverpool and Great Western Steam Company (Limited), is a corporation organized under the laws of Great Britain, and, in the month of March, 1880, and for a long time prior thereto, was the owner of the steamer Montana. The libellant, The Phenix Insurance Company, has been for many years, and still is, a corporation duly organized and existing under and by virtue of the laws of the State of New York for transacting the business of insurance, including marine risks. During said time, it had an agency in Liverpool, England, for the adjustment and settlement of losses, and the losses referred to herein were adjusted by such agency, and were paid by it in Liverpool. The Montana was an ocean steamer,

Page 129 U. S. 405

built of iron, and performed regular service as a common carrier of merchandise and passengers between the ports of Liverpool, England, and New York, in the line commonly known as the Guion Line. By her, and by other ships in that line, the respondent was such common carrier."

"On March 2, 1880, the Montana left the port of New York, on one of her regular voyages, bound for Liverpool, England, with a full cargo, consisting of about twenty-four hundred tons of merchandise, and with passengers. She stopped at Queenstown in the afternoon of March 12, and thence proceeded on her voyage. She passed Tuskar Rock, on the extreme southeastern portion of Ireland, at about eight o'clock in the evening of March 12, and thence took a course up and across the Irish Channel. The course she took would ordinarily have carried her outside of the range of the South Arklow Light, which is a light on the east coast of Ireland, but, with the wind, tides and currents as they were that night, she passed within range of that light, and about nine miles off, at 9:45 P.M. On passing the South Arklow Light, the next light which those in charge of the navigation of the Montana expected to make was the South Stack Light, on the coast of Wales, at the entrance of Holyhead Bay. The master of the Montana was on the bridge and in charge of her navigation."

"The lighthouse on South Stack carried two lights. One, the high light, was about 170 feet above high water. It was white in color, and exhibited in all directions at sea, with a range of from twenty to thirty miles in clear weather. It was a revolving light, making one complete revolution in six minutes, and it showed a white flash light every minute. The other light was also white. It was about 40 feet above high water, and was a semi-revolving light, exhibiting every minute and a half in all directions between east northeast and west by north. Its range in clear weather was from three to four miles, but it was regularly lit only in foggy or thick weather. Both of these lights were lit and burning all through the night of March 12. A fog bell was regularly sounded at South Stack from ten o'clock in the night of March 12 until six o'clock in the morning of March 13. The bell weighed two and a quarter

Page 129 U. S. 406

tons, and was operated upon by a hammer weighing about ninety-six pounds, which struck the bell on the outside at intervals of fifteen seconds, and was worked by means of clockwork and a caloric engine. The sound was a powerful one, and its range was from three to four miles. The high light on the South Stack was established in 1809, and has ever since been regularly maintained. The fog bell has been established for about twenty years, and has since then been regularly sounded in foggy weather."

"About east northeast, magnetic, from South Stack, and distant about one mile therefrom, was a fog gun station, known as North Stack. This fog gun station had been established about twenty years, and from midnight of March 12 until four o'clock in the morning of March 13 the fog gun was fired regularly every ten minutes. The gun was a twenty-four pounder, and was each time charged with three pounds of powder, and a large junk wad to give extra sound, the range of the sound being between five and six miles when the fog was thick, with the wind, and about seven miles when the fog lifted. The fog gun station, since it was established, has been regularly maintained and the fog gun fired regularly in foggy weather."

"About two miles east, magnetic, from North Stack was the Holyhead Breakwater Lighthouse. This lighthouse was at the outer end of Holyhead Breakwater, and it carried a fixed red light at a height of from sixty to seventy feet above high water, with flashes every seven and one half seconds. The range of the light in clear weather was from three to four miles, and the range of the flash was about fourteen miles. The light was established in 1873, and has since then been regularly maintained. At the Breakwater Lighthouse was a fog bell, weighing about five hundred weight, which was operated upon by two hammers, worked by clock-work and striking the bell on the outside three times in quick succession at intervals of fifteen seconds. The range of the sound was from a mile and a half to two miles. The bell was established in 1873, and was regularly rung in foggy weather. It was in operation from midnight of March l2 until five o'clock in the morning of March 13. "

Page 129 U. S. 407

"About five miles north northeast, magnetic, from Holyhead Breakwater lighthouse and across Holyhead Bay was the Skerries Lighthouse. The Skerries Lighthouse was about northeast, magnetic, from South Stack Lighthouse, and distant therefrom between seven and eight miles. It was situated on a small island about two miles off Carmel Head, and about two or three miles north northwest, magnetic, from Church Bay. It carried a stationary white light between eighty and ninety feet above low water mark, exhibiting in all directions at sea and in Holyhead Bay, with a range of about sixteen miles. It was burning all through the night of March 12. It was established between seventy and eighty years ago, and has been regularly maintained since. There was at Skerries Lighthouse a foghorn or siren, worked by two powerful caloric engines at a pressure of fifty pounds to the square inch. The sound made was shrill and powerful, and had a range of eight miles in foggy weather, and the sound was regularly given from ten o'clock at night of March 12 until half past tour o'clock in the morning of March 13, at intervals of three minutes. This foghorn or siren had been established for several years, and it has been regularly maintained ever since."

"All through the night of March 12, until five o'clock in the morning of March 13, a fog overspread the land surrounding Holyhead Bay, and extended, at times, and to some extent, into the bay and out to sea. The proper course of the Montana was to keep three or four miles off the land at the South Stack, and on a course about northeast by east, magnetic, until she had the Skerries abaft her beam, and then to take a course about east by south, magnetic, to Liverpool. There was a westerly variation of about two points between magnetic courses and true courses in the Irish Channel and adjacent waters."

"The Montana, on a course about northeast by east, magnetic, passed within a short distance of South Stack Lighthouse and saw the high light there between one and two o'clock in the morning of March 13. It came into sight, bearing about southeast by east and about one point forward of the starboard beam of the Montana. Her officers expected to see it at a

Page 129 U. S. 408

distance of about twenty miles off, bearing from east northeast to northeast by east. When they saw it first, they thought it to be fifteen miles off, and they remained of that opinion. It passed out of sight abaft their beam, they supposing it was hidden by the horizon. The master of the Montana did not ascertain by cross-bearings (which he might readily have made) the distance at which he was from the light. He lost the light because it was shut out from him by a fog which intervened between it and the Montana, and thence he continued, with his engines working at full speed, and giving the Montana a speed through the water of about fourteen knots an hour, and on an east three-quarters south magnetic course, to which he had changed, which took him directly into Holyhead Bay, until after half past two o'clock. Before this time, a man had been stationed at the fog whistle of the Montana, who regularly blew it. At about half past two o'clock, the master of the Montana heard the fog gun on North Stack off his starboard quarter, abaft his starboard beam, and he thereupon changed the course of the steamer again to northeast by east magnetic, but he continued his engines at full speed until 2.45 A.M., at which time the engines were put at half speed, which gave the steamer a speed through the water of between nine and ten knots per hour. Five minutes later, the shore loomed up through the fog on the starboard bow, and orders were given to slow and stop the engines and to put them full speed astern, but before these latest orders could be executed, the Montana ran ashore at Clegyr Point in Church Bay. After leaving Tuskar, and up to one o'clock in the morning of March 13, the Montana was running with a flood tide. Then there was slack water, and she afterward encountered an ebb tide, which ran from three to four knots an hour."

"At no time that night were any soundings taken on board of the Montana, though soundings would have indicated to her master that he was running rapidly onto the shore. The lights at Holyhead Breakwater and the Skerries were not seen by those in charge of the navigation of the Montana and her lookouts, and those in charge of her navigation did not hear the fog bell at South Stack or that at Holyhead Breakwater or the

Page 129 U. S. 409

siren at the Skerries, and they did not hear the fog gun at North Stack until it was on their quarter. When they lost sight of the South Stack Light, they were within range of the Skerries light, and ought to and would have seen it unless it was shut out by a fog. The water outside of Holyhead Bay ranged from twenty to eighty fathoms in depth, while the water in Holyhead Bay ranged from five to seventeen fathoms in depth, regularly shoaling as the shore was approached."

"Almost immediately after the Montana ran ashore, she commenced filling with water, and thereby her cargo was in large part destroyed or damaged. Portions of it were thereafter taken from the steamer and forwarded to Liverpool, and there delivered. The Montana was then floated and taken to Liverpool for repairs."

"Those in charge of the navigation of the Montana were negligent in that, without having taken cross-bearings of the light at South Stack, and so determined their distance from the light, they took an east three-quarters south course before passing the Skerries, and without seeing the Skerries light, and in that they continued at full speed after hearing the fog gun at North Stack, and in that they took a northeast by east magnetic course on hearing said fog gun, instead of stopping and backing and taking a westerly course out of Holyhead Bay, and in that they did not ascertain their position in Holyhead Bay by means of the lights and fog signals, or by the use of the lead, or by stopping until they should, by those means or otherwise, learn where their ship was."

The substance of the rest of the findings of fact and of the documents made part thereof was as follows:

The bacon and hams were owned by Jessie Baxter, of Brooklyn, in the State of New York, and were shipped at New York, and the insurance obtained on her account by Archibald Baxter, agent. Part of the cotton was owned by Gilbert Parkes & Co., merchants, of Nashville in the State of Tennessee, shipped by them at Nashville, and at or after the date of shipment sold by them to Hobart, Smith & Co., merchants, of the City of New York, who obtained the insurance thereon. The rest of the cotton was owned by Swanson, Porteous & Co.,

Page 129 U. S. 410

merchants of the City of New York, and was shipped on their account at Nashville, and the insurance obtained by them. All the goods were shipped under the bills of lading annexed to the answer, and were insured at their value by the libellant against perils of the seas and other usual marine risks, including

"barratry of the master and mariners, and all other perils, losses and misfortunes that have or shall come to the hurt, detriment, or damage of the said goods and merchandises or any part thereof,"

and were damaged by the stranding. And the libellant afterwards, upon due adjustment of the general and particular average, paid to the assured or their assigns, in settlement of the insurance, various sums of money, amounting in all to

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