The IrrawaddyAnnotate this Case
171 U.S. 187 (1969)
U.S. Supreme Court
The Irrawaddy, 171 U.S. 187 (1898)
Submitted April 11, 1898
Decided May 81, 1898
171 U.S. 187
CERTIFICATE FROM THE CIRCUIT COURT
OF APPEALS FOR THE SECOND CIRCUIT
If a vessel, seaworthy at the beginning of the voyage, is afterwards stranded by the negligence of her master, the shipowner, who has exercised due diligence to make his vessel in all respects seaworthy, properly manned, equipped and supplied, under the provisions of § 3 of the Act of February 13, 1893, c. 105, 27 Stat. 495, has not a right to general average contribution for sacrifices made and suffered by him subsequent to the stranding in successful efforts to save vessel, freight and cargo.
The main purposes of the Act of February 13, 1893, known as the Harter Act, were to relieve the shipowner from liability for latent defects, not discoverable by the utmost care and diligence, and, in the event that he has exercised due diligence to make his vessel seaworthy, to exempt him and the ship from responsibility for damages or loss resulting from faults or errors in navigation or in the management of the vessel; but the Court cannot 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.
In determining the effect of this statute in restricting the operation of general and well settled principles, the Court treats those principles as still existing, and limits the relief from their operation afforded by the statute to that called for by the language of the statute.
This case comes here on a certificate from the United States Circuit Court of Appeals for the Second Circuit.
The facts out of which the question arises are as follows:
On November 9, 1895, the British steamship Irrawaddy, upon a voyage from Trinidad to New York, with cargo, stranded on the coast of New Jersey through the negligent navigation of her master. Up to the time of stranding, she was properly manned, equipped, and supplied, and was seaworthy.
The vessel was relieved from the strand November 20th as the result of sacrifices by jettison of a portion of her cargo, of sacrifices and losses voluntarily made or incurred by the shipowners through the master, and through the services of salvors.
The Irrawaddy then completed her voyage and made delivery of the remainder of her cargo to the consignees in New York on their executing an average bond for the payment of losses and expenses which should appear to be due from them, provided they were stated and apportioned by the adjusters "in accordance with established usages and laws in similar cases."
An adjustment was afterwards made in New York which allowed in the general average account the compensation of the salvors, the sacrifices of cargo, and the losses and sacrifices of the shipowner.
The respondents thereupon paid $4,483.64, which was their full assessment, except the sum of $508.29, charged against them in respect of sacrifices of the shipowner, which they refused to pay.
The district court made a decree in favor of the libelants, from which decree the respondents duly appealed to this Court.
Upon these facts, the court desires instruction upon the following question of law, namely:
If a vessel, seaworthy at the beginning of the voyage, is afterwards stranded by the negligence of her master, has the shipowner, who has exercised due diligence to make his vessel in all respects seaworthy, properly manned, equipped, and supplied, under the provisions of section 3 of the Act of February 13, 1895, a right to general average contribution for
sacrifices made and suffered by him subsequent to the stranding, in successful efforts to save vessel, freight, and cargo?
MR. JUSTICE SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the Court.
The answer we shall give to the question certified by the circuit court of appeals must be determined by the meaning and effect which should be given to the Act of February 13, 1893, c. 105, 27 Stat. 445, known as the "Harter Act." Admittedly, upon the facts conceded to exist in the present case, the owner of the ship has no right to a general average contribution from the cargo unless such right arises from the operation of that act.
We shall first inquire why it is that, apart from the act in question, the owner of the ship is not entitled to a general average contribution where the loss was occasioned by the fault of the master or crew, and we find the rule is founded on the principle that no one can make a claim for general average contribution if the danger to avert which the sacrifice was made has arisen from the fault of the claimant or of someone for whose acts the claimant has made himself or is made by law responsible to the co-contributors. We are not called upon either to trace the history of the rule or to justify it as based on equitable principles, as it is conceded on both sides that such is the ordinary rule in the absence of statute or contract to modify it.
Nor is it necessary to inquire into the origin or nature of the law of general average. That has been so recently and thoroughly done in Ralli v. Troop,157 U. S. 386, that it is sufficient to refer to the opinion of MR. JUSTICE GRAY in that case.
Not only is the shipowner excluded from contribution by
way of general average when the loss arises from the ship's fault, but he is legally responsible to the owner of the cargo for loss and damages so occasioned. And it is the well settled law of this Court that a common carrier by sea cannot, by any stipulation with a shipper of goods, exempt himself from responsibility for loss or damage arising from the negligence of the officers or crew; that it is against the policy of the law to allow stipulations that will relieve a carrier from liability for losses caused by the negligence of himself or his servants. Liverpool Navigation Co. v. Phenix Ins. Co.,129 U. S. 397.
Further, it has frequently been decided by this Court that in every contract for the carriage of goods by sea, unless otherwise expressly stipulated, there is a warranty on the part of the shipowner that the ship is seaworthy at the time of beginning her voyage, and not merely that he does not know her to be unseaworthy at the time of beginning her voyage, or that he has used his best efforts to make her seaworthy, and that his undertaking is not discharged because the want of fitness is the result of latent defects. Richelieu Navigation Co. v. Boston Insurance Co.,136 U. S. 408; The Ed. J. Morrison,153 U. S. 199; The Caledonia,157 U. S. 124.
In this condition of the law, the so-called "Harter Act" was approved on February 13, 1893, wherein, after providing, in the first and second sections, that it shall not be lawful for any owner, agent, or master of any vessel transporting merchandise or property from or between ports of the United States and foreign ports to exempt himself from liability for loss or damage arising from negligence in the loading or proper delivery of such property, or to insert in any bill of lading any covenant or agreement whereby the obligations of the owner to exercise due diligence in manning and equipping the vessel, and to make such vessel seaworthy and capable of performing her intended voyage, should be in anywise lessened, weakened, or avoided, it was, in the third section, enacted as follows:
"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, agents, or charterers shall become or be held responsible for damage or loss resulting from faults or errors in navigation or in the management of said vessel, nor shall the vessel, her owner or owners, charterers, agent, or master be held liable for losses arising from the danger 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 on behalf of the shipowner is clearly expressed by the learned judge of the district court in the following terms:
"There is no doubt, I think, that the liability to indemnify the cargo owner is the sole ground of the exclusion of the shipowner's claim to general average compensation for his expenses in rescuing the adventure from a peril caused by bad navigation. It therefore seems necessarily to follow that, in cases where all such liability is abolished by law, as it is under the circumstances of this case by the Harter Act, no such exclusion can be justified, and that where no such liability exists on the part of the ship or her owner, his right to a general average contribution from the cargo arises necessarily by the same principles of equitable right that apply in ordinary cases of general average. Where due diligence has been exercised to make the ship seaworthy, and a common danger arises upon the voyage by 'fault or error in the navigation or management of the ship,' the third section of that act declares that 'neither the vessel nor her owner, agent, or charterer shall become or be held responsible for damage or loss resulting therefrom.' The previous liability of the shipowner to the cargo owner for faults of navigation is thus abolished in all cases coming within the act. In such cases, faults in the navigation or management of the ship are no longer, by construction
of law, faults of the owner, as heretofore, and the ship and her owner are now no more liable to the cargo owner for his damages therefrom than the latter is liable to the shipowner for the resulting damages to the ship. Both are alike strangers to the fault, and equally free from all responsibility for it, and hence all expenditures or losses voluntarily incurred for the common rescue are no longer made in the discharge of an individual legal obligation or in diminution of a fixed liability resting upon one of the parties only, but are truly a sacrifice, voluntarily incurred and for the common benefit, as much and as truly so when made by the shipowner as when made by the cargo owner alone. On principle, therefore, in such cases, the one is as much entitled to a general average contribution for his sacrifice as the other. . . . The application of this new relation of nonresponsibility under the Harter Act to cases of general average does not in fact make the least change in the principles of general average contribution. The rule remains as before -- that he by whose fault, actual or constructive, the ship and cargo have been brought into danger cannot recover an average contribution for his expenses in extricating them. And so the counter-rule remains as before -- that the interest which, being without fault, makes sacrifices for the common rescue is entitled to an average contribution from what is thereby saved. Prior to the Harter Act, the shipowner, under our law, was constructively in fault for bad navigation, and hence fell within the former rule. The Harter Act, by abolishing his constructive fault and freeing him from all responsibility, withdraws him from the former rule and entitles him to contribution under the latter."
82 F. 472, 474-477.
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 passage 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 crew. This inequality, of course, operated unfavorably on the American shipowner, 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 that if the owners exercised due diligence in making their ships seaworthy and in duly manning and equipping them, there should be 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 employees 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 decisions 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, but 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 owner from liability for the negligence of those who manage the 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.
What was the reasoning on which the courts proceeded in holding that it was against public policy to permit shipowners to contract for exemption from liability for the negligence of their agents? Was it not that such a State of the law would impel the shipowners to exercise care in the selection of those for whose conduct they were to be responsible? This being so, can it be reasonably inferred that Congress intended, when relieving shipowners from liability for the misconduct of their agents, to confer upon them the further right to participate in a general average contribution, and that to the detriment of the shippers? Such an interpretation of the statute would tend to relieve shipowners, to some extent at least, from care in the selection of the master and crew, and it would likewise operate to influence the master in deciding, in an emergency, whether he would make a case of general average by sacrificing the vessel, in whole or in part. If he knew that the owner would participate in a contribution occasioned by a loss, he would be the less likely to exert himself and crew to avoid the loss.
It is said that it has been decided by the English courts that when, by a contract in the bill of lading, the shipowner is exonerated from liability for loss caused by the fault of the master or crew, he is entitled to share in a general average contribution.
An examination of the cases cited has not convinced us that there has been any such final decision by the English courts. The case of The Carron Park, 15 P.D. 203, does indeed hold that the relation of the goods owner to the shipowner was altered by the contract, that the shipowner was not to be responsible for the negligence of his servants in the events which have happened, and that therefore the shipowner's claim for general average was allowed. On the other hand,
in the case of The Ettrick, 6 P.D. 127, the shipowner claimed the benefit of a general average contribution rendered necessary by reason of negligence in navigation, and put his claim on the ground that, having availed himself of the limited liability laws by paying into court the
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