Without signing a formal stevedoring contract or an express
indemnity agreement, a stevedoring contractor agreed to perform all
stevedoring operations required by a shipowner in the latter's
coastwise service. Under this agreement, the contractor loaded a
ship at Georgetown, S.C., with a mixed cargo, including rolls of
pulpboard, and unloaded it in navigable water at a pier in
Brooklyn, N.Y. During the unloading, a longshoreman employed by the
contractor was injured by a roll of pulpboard which had been
insufficiently secured when stored by the contractor in Georgetown.
Under the Longshoremen's Act, the contractor's insurance carrier
paid the longshoreman compensation and furnished him medical
services, without any formal award by the Deputy Commissioner.
Claiming that, because of unsafe stowage of the cargo, the ship was
unseaworthy and that the shipowner had neglected to furnish him
with a safe place to work, the longshoreman sued the shipowner and
obtained a judgment for a much larger sum, from which the
contractor's insurance carrier was to be reimbursed for the amount
it had advanced to the longshoreman.
on the shipowner's third-party complaint against
the contractor, the shipowner was entitled to reimbursement from
the contractor for the amount of the judgment against the
shipowner. Pp. 350 U. S.
1. Section 5 of the Longshoremen's and Harbor Workers'
Compensation Act, which provides that the liability of an employer
prescribed in § 4 "shall be exclusive and in place of all other
liability of such employer to the employee," does not preclude
assertion by the shipowner of the contractor's contractual
liability to it, though the contractor was also the employer of the
injured longshoreman. Pp. 350 U. S.
2. Even in the absence of an express agreement of indemnity, the
contractor was obligated to reimburse the shipowner for damages
caused it by the contractor's breach of its contract to stow the
cargo properly and safely. Pp. 350 U. S.
3. Halcyon Lines v. Haenn Ship Corp., 342 U.
, distinguished. P. 350 U. S.
Page 350 U. S. 125
4. That the shipowner had an obligation to supervise the stowage
and had a right to reject unsafe stowage and did not do so does not
bar the shipowner's right to recover from the contractor any damage
caused by the contractor's failure to stow the rolls safely. Pp.
350 U. S.
211 F.2d 277 affirmed.
MR. JUSTICE BURTON delivered the opinion of the Court.
This case presents two questions as to the liability of a
stevedoring contractor to reimburse a shipowner for damages paid by
the latter to one of the contractor's longshoremen on account of
injuries received by him in the course of his employment on
shipboard. 1. The first question is whether the Longshoremen's and
Harbor Workers' Compensation Act [Footnote 1
] precludes a shipowner from asserting such a
liability. 2. The second is whether the liability exists where a
contractor, without entering into an express agreement of
indemnity, contracts to perform a shipowner's stevedoring
operations and the longshoreman's injuries are caused by the
contractor's unsafe stowage of the ship's cargo. For the reasons
hereafter stated, we answer the first question in the negative and
the second in the affirmative.
In 1949, respondent, Pan-Atlantic Steamship Corporation, a
Delaware corporation, operated the SS. Canton
Page 350 U. S. 126
in the American coastwise trade under a
bareboat charter. As evidenced by letters, but without a formal
stevedoring contract or an express indemnity agreement, respondent
secured, for that year, the agreement of petitioner, Ryan
Stevedoring Co., inc., an Alabama corporation, to perform all
stevedoring operations required by respondent in its coastwise
service. Pursuant to that contract, petitioner loaded the
at Georgetown, South Carolina, with mixed
cargo. This included pulpboard, such as is used in making
corrugated paper and paper bags, shipped in rolls 4 feet wide and 3
to 5 feet long. Petitioner stowed some of these rolls side-by-side
on the floor of Hatch No. 3 and "nested" others above them by
placing the upper rolls in the troughs between the lower ones. To
immobilize the rolls, it was necessary to secure or "chock" the
bottom tier with wedges or with miscellaneous pieces of wood known
as "dunnage." There is little evidence as to what took place when
the rolls were stowed at Georgetown, but it was the uniform
practice of petitioner's longshoremen to stow such cargo under the
immediate direction of their hatch foreman, while respondent's
cargo officers supervised the loading of the entire ship and had
authority to reject unsafe stowage.
A few days later, on July 20, 1949, in navigable water at a pier
in Brooklyn, New York, petitioner engaged in unloading these rolls.
While one of petitioner's Brooklyn longshoremen, Frank Palazzolo,
was working in Hatch No. 3, one roll, weighing about 3,200 pounds,
broke loose from the others, struck him violently, and severely
injured his left leg. There is no evidence that he was negligent.
On the other hand, it appears that the rolls in Hatch No. 3 had
been insufficiently secured when stowed by petitioner in
Georgetown. This is established by the absence of proper wedges and
dunnage holding the rolls in place at the time of the accident.
Page 350 U. S. 127
Petitioner's insurance carrier under the Longshoremen's Act paid
Palazzolo $2,940 compensation and furnished him medical services
costing $9,857.36, all without any formal award by the Deputy
Commissioner. As permitted by § 33 of that Act, Palazzolo sued the
respondent shipowner in the Supreme Court of New York. [Footnote 2
] He claimed that the unsafe
stowage of the cargo, which caused his injuries, established either
the unseaworthiness of the ship or the shipowner's negligence in
failing to furnish him with a safe place to work, or both. The
shipowner removed the case to the United States District Court for
the Eastern District of New York and filed a third-party complaint
against petitioner. By stipulation, Palazzolo's case against the
shipowner was tried to a jury, which returned a verdict in his
favor for $75,000.
Page 350 U. S. 128
The District Court entered judgment on the jury verdict. From
the above sum, petitioner's insurance carrier was to be reimbursed
for the $12,797.36 it had advanced because of Palazzolo's
Also by stipulation, the shipowner's third-party complaint was
submitted on the same record to the judge who had presided over
Palazzolo's case. He dismissed the complaint. 111 F.
. The Court of Appeals affirmed Palazzolo's judgment,
but reversed the dismissal of the third-party complaint and
directed that judgment be entered for the shipowner. 211 F.2d 277.
Petitioner, the stevedoring contractor, contends that the order
reversing the dismissal of the impleader suit is erroneous. Because
of the wide application of the case and the conflicting views that
have been expressed on the issues, we granted certiorari. 349 U.S.
813. The United States filed a brief as amicus curiae
support of the shipowner and took part in the oral argument. 348
U.S. 948. The judgment was affirmed by an equally divided Court,
349 U.S. 901, but the case was restored to the docket for
reargument before a full Court, 349 U.S. 926.
1. The first question is whether the Longshoremen's
Compensation Act precludes the assertion by a shipowner of a
stevedoring contractor's liability to it, where the contractor is
also the employer of the injured longshoreman.
Neither court below discussed this question, although petitioner
presented it to them. Petitioner's argument is based upon the
following provision in the Longshoremen's and Harbor Workers'
"SEC. 5. The liability of an employer
section 4 [for compensation] shall be exclusive and in place of
all other liability of such employer to the employee,
legal representative, husband or wife,
Page 350 U. S. 129
parents, dependents, next of kin, and anyone otherwise
entitled to recover damages from such employer at law or in
admiralty on account of such injury or death,
except that if
an employer fails to secure payment of compensation as required by
this Act, an injured employee, or his legal representative in case
death results from the injury, may elect to claim compensation
under this Act, or to maintain an action at law or in admiralty for
damages on account of such injury or death. . . ."
(Emphasis supplied.) 44 Stat. 1426, 33 U.S.C. § 905.
The obvious purpose of this provision is to make the statutory
liability of an employer to contribute to its employee's
compensation the exclusive liability of such employer to its
employee, or to anyone
claiming under or through such
employee, on account of his injury or death arising out of that
In return, the employee, and those claiming under
or through him, are given a substantial quid pro quo
the form of an assured compensation, regardless of fault, as a
substitute for their excluded claims. On the other hand, the Act
prescribes no quid pro quo
for a shipowner that is
compelled to pay a judgment obtained against it for the full amount
of a longshoreman's damages. [Footnote 3
Section 5 of the Act expressly excludes the liability of the
employer "to the employee," or others, entitled to recover "on
account of such [employee's] injury or death." Therefore, in the
instant case, it excludes the
Page 350 U. S. 130
liability of the stevedoring contractor to its longshoreman, and
to his kin, for damages on account of the longshoreman's injuries.
At the same time, however, § 5 expressly preserves to each employee
a right to recover damages against third persons. [Footnote 4
] It thus preserves the right,
which Palazzolo has exercised, to recover damages from the
shipowner in the present case. The Act nowhere expressly excludes
or limits a shipowner's right, as a third person, to insure itself
against such a liability either by a bond of indemnity, or the
contractor's own agreement to save the shipowner harmless.
Petitioner's agreement in the instant case amounts to the latter,
for, as will be shown, it is a contractual undertaking to stow the
cargo "with reasonable safety," and thus to save the shipowner
harmless from petitioner's failure to do so.
In the face of a formal bond of indemnity, this statute clearly
does not cut off a shipowner's right to recover from a bonding
company the reimbursement that the indemnitor, for good
consideration, has expressly contracted to pay. Such a liability
springs from an independent contractual right. It is not an action
by or on behalf of the employee, and it is not one to recover
damages "on account of" an employee's "injury or death." It is a
simple action to recover, under a voluntary and self-sufficient
contract, a sum measured by foreseeable damages occasioned to the
shipowner by the injury or death of a longshoreman on its ship.
A like result occurs where a shipowner sues, for breach of
warranty, a supplier of defective ship's gear that has caused
injury or death to a longshoreman using it in the course of his
employment on shipboard. And a like liability for breach of
contract accrues to a shipowner against a stevedoring contractor in
any instance when the
Page 350 U. S. 131
latter's improper stowage of cargo causes an injury on shipboard
to some one other than one of its employees. The coincidence that
the loading contractor here happens to be the employer of the
injured longshoreman makes no difference in principle. While the
Compensation Act protects a stevedoring contractor from actions
brought against it by its employee on account of the contractor's
tortious conduct causing injury to the employee, the contractor has
no logical ground for relief from the full consequences of its
independent contractual obligation, voluntarily assumed to the
shipowner, to load the cargo properly. See American Stevedores
v. Porello, 330 U. S. 446
Crawford v. Pope & Talbot,
206 F.2d 784, 792-793;
Brown v. American-Hawaiian S.S. Co.,
211 F.2d 16; Rich
v. United States,
177 F.2d 688; United States v. Arrow
175 F.2d 329. [Footnote 5
The shipowner's action here is not founded upon a tort, or upon
any duty which the stevedoring contractor owes to its employee. The
third-party complaint is grounded upon the contractor's breach of
its purely consensual obligation
Page 350 U. S. 132
owing to the shipowner
to stow the cargo in a
reasonably safe manner. Accordingly, the shipowner's action for
indemnity on that basis is not barred by the Compensation Act.
2. The other question is whether, in the absence of an
express agreement of indemnity, a stevedoring contractor is
obligated to reimburse a shipowner for damages caused it by the
contractor's improper stowage of cargo.
The answer to this is found in the precise ground of the
shipowner's action. By hypothesis, its action is not based on a
bond of indemnity such as it may purchase by way of insurance, or
may require of its stevedoring contractor, and which expressly
undertakes to save the shipowner harmless. If the shipowner did
hold such an express agreement of indemnity here, it is not
disputed that it would be enforceable against the indemnitor. On
the other hand, the shipowner's action for indemnity here is not
based merely on the ground that the shipowner and contractor each
is responsible in some related degree for the tortious stowage of
cargo that caused injury to Palazzolo. Such an action, brought
Page 350 U. S. 133
upon contractual undertakings, would present the bald question
whether the stevedoring contractor or the shipowner, because of
their respective responsibilities for the unsafe stowage, should
bear the ultimate burden of the injured longshoreman's judgment.
That question has been widely discussed elsewhere in terms of the
relative responsibility of the parties for the tort, and those
discussions have dealt with concepts of primary and secondary or
active and passive tortious conduct. [Footnote 7
] Because respondent in the instant case relies
entirely upon petitioner's contractual obligation, we do not meet
the question of a noncontractual right of indemnity or of the
relation of the Compensation Act to such a right.
The shipowner's claim here also is not a claim for contribution
from a joint tortfeasor. Consequently, the considerations which led
to the decision in Halcyon Lines v. Haenn Ship Ceiling &
Refitting Corp., 342 U. S. 282
not applicable. See American Mutual Liability Ins. Co. v.
182 F.2d 322.
The shipowner here holds petitioner's uncontroverted agreement
to perform all of the shipowner's stevedoring operations at the
time and place where the cargo in question was loaded. That
agreement necessarily includes petitioner's obligation not only to
stow the pulp rolls, but to stow them properly and safely.
Competency and safety of stowage are inescapable elements of the
service undertaken. This obligation is not a
-contractual obligation implied in law or arising out
of a noncontractual relationship. It is of the essence of
petitioner's stevedoring contract. It is petitioner's warranty of
workmanlike service that is comparable to a manufacturer's
Page 350 U. S. 134
warranty of the soundness of its manufactured product. The
shipowner's action is not changed from one for a breach of contract
to one for a tort simply because recovery may turn upon the
standard of the performance of petitioner's stevedoring service.
The Court of Appeals has stated that the liability of petitioner
in this case is for the performance of its obligation to stow the
rolls on board ship "in a reasonably safe manner." 211 F.2d at 279.
That court also has affirmed the decision of the District Court
which was based upon the verdict of the jury that petitioner's
improper stowage of the rolls produced either the unseaworthiness
of the ship or the hazardous working condition which is the basis
for the shipowner's liability to Palazzolo.
Petitioner suggests that, because the shipowner had an
obligation to supervise the stowage and had a right to reject
unsafe stowage of the cargo and did not do so, it now should be
barred from recovery from the stevedoring contractor of any damage
caused by that contractor's uncorrected failure to stow the rolls
"in a reasonably safe manner." Accepting the facts and obligations
as above stated, the shipowner's present claim against the
contractor should not thereby be defeated. Whatever may have been
the respective obligations of the stevedoring contractor and of the
shipowner to the injured longshoreman for proper stowage of the
cargo, it is clear that, as between themselves, the contractor, as
the warrantor of its own services, cannot use the shipowner's
failure to discover and correct the contractor's own breach
Page 350 U. S. 135
of warranty as a defense. Respondent's failure to discover and
correct petitioner's own breach of contract cannot here excuse that
breach. [Footnote 9
The judgment of the Court of Appeals, accordingly, is
44 Stat. 1424 et seq., as amended, 33 U.S.C. § 901 et
"Sec. 33. (a) If on account of a disability or death for which
compensation is payable under this Act the person entitled to such
compensation determines that some person other than the employer is
liable in damages, he may elect, by giving notice to the deputy
commissioner in such manner as the Secretary [of Labor] may
provide, to receive such compensation or to recover damages against
such third person."
"(b) Acceptance of such compensation under an award in a
compensation order filed by the deputy commissioner shall operate
as an assignment to the employer of all right of the person
entitled to compensation to recover damages against such third
"* * * *"
"(i) Where the employer is insured and the insurance carrier has
assumed the payment of the compensation, the insurance carrier
shall be subrogated to all the rights of the employer under this
44 Stat. 1440, as amended, 33 U.S.C. § 933(a, b) and (i).
For procedure to secure an award of compensation, see
19, 44 Stat. 1435-1436, as amended, 33 U.S.C. § 919.
A longshoreman, after accepting compensation payments from his
employer without an award, may sue a third-party tortfeasor for his
injuries. American Stevedores v. Porello, 330 U.
, 330 U. S.
-456. If the facts permit, he may recover from the
shipowner for unseaworthiness, or for negligence, or both. Pope
& Talbot v. Hawn, 346 U. S. 406
In the instant case, the stevedoring contractor, however, has
received a contractual quid pro quo
from the shipowner for
assuming responsibility for the proper performance of all of the
latter's stevedoring requirements, including the discharge of
foreseeable damages resulting to the shipowner from the
contractor's improper performance of those requirements.
Restatement, Contracts, §§ 334, 330; Bethlehem
Shipbuilding Corp. v. Joseph Gutradt Co.,
10 F.2d 769;
Mowbray v. Merryweather,
 2 Q.B. 640 (C.A.).
§ 33(a) in note
There is nothing in the legislative history of the Compensation
Act calling for a contrary interpretation. Our interpretation of
that Act is supported also by that of the New York Workmen's
Compensation Law upon which it is modeled. The latter Act provides
"liability of an employer [for compensation] prescribed by the
last preceding section shall be exclusive and in place of any other
liability whatsoever, to such employee, his personal
representatives, husband, parents, dependents or next of kin, or
anyone otherwise entitled to recover damages at common law or
otherwise on account of such injury or death . . . ."
McKinney's N.Y.Laws, Workmen's Compensation Law, § 11.
See Westchester Lighting Co. v. Westchester County Small
278 N.Y. 175, 15 N.E.2d 567. Other state courts
have reached comparable results as to exclusive liability clauses
in their respective Compensation Acts. 2 Larson, Workmen's
Compensation Law, §§ 76.00-76.44(a).
We do not reach the issue of the exclusionary effect of the
Compensation Act upon a right of action of a shipowner under
comparable circumstances without reliance upon an indemnity or
service agreement of a stevedoring contractor. See Brown v.
American-Hawaiian S.S. Co.,
211 F.2d 16, 18; States S.S.
Co. v. Rothschild International Stevedoring Co.,
205 F.2d 253;
Slattery v. Marra Bros.,
186 F.2d 134 (N.J. statute);
United States v. Rothschild International Stevedoring Co.,
183 F.2d 181; American Mutual Liability Ins. Co. v.
182 F.2d 322; American District Telegraph Co. v.
179 F.2d 946; McFall v. Compagnie Maritime
304 N.Y. 314, 107 N.E.2d 463. And see
Weinstock, The Employer's Duty to Indemnify
Shipowners for Damages Recovered by Harbor Workers, 103 U. of
Pa.L.Rev. 321 (1954).
See Brown v. American-Hawaiian S.S. Co., supra; Crawford v.
Pope & Talbot, supra; McFall v. Compagnie Maritime Belge,
Weinstock, The Employer's Duty to Indemnify Shipowners
for Damages Recovered by Harbor Workers, supra.
See Union Stock Yards Co. of Omaha v. Chicago, B. & Q.
R. Co., 196 U. S. 217
Brown v. American-Hawaiian S.S. Co., supra; Crawford v. Pope
& Talbot, supra,
206 F.2d at 792-793; American Mutual
Liability Ins. Co. v. Matthews, supra,
182 F.2d at 323-325;
Rich v. United States, supra; Bethlehem Shipbuilding Corp. v.
Joseph Gutradt Co., supra; Mowbray v. Merryweather, supra; Dunn v.
Uvalde Asphalt Paving Co.,
175 N.Y. 214, 67 N.E. 439.
See Berti v. Compagnie De Navigation Cyprien Fabre,
F.2d 397; Hastorf Contracting Co. v. Ocean Transportation
4 F.2d 583, aff'd,
4 F.2d 584; Mowbray v.
Merryweather, supra; Boston Woven Hose & Rubber Co. v.
178 Mass. 232, 59 N.E. 657.
MR. JUSTICE BLACK, with whom THE CHIEF JUSTICE, MR. JUSTICE
DOUGLAS, and MR. JUSTICE CLARK concur, dissenting.
The petitioner, Ryan Stevedoring Company, is an employer subject
to the Longshoremen's and Harbor Workers' Compensation Act.
] Section 5 of that
Act completely abolished all rights of longshoremen to sue their
employers for injuries resulting from negligence of the employer or
his employees. The Act substituted for old tort remedies a
prescribed schedule of compensation for employees' injuries or
death which was declared to be
"exclusive and in place of all other liability of such employer
to the employee . . . and anyone otherwise entitled to recover
damages from such employer at law or in admiralty on account of
such injury or death. . . ."
I think the Court's holding today breaks promises the Act made
both to employers and employees. My view requires a more detailed
statement of the facts and circumstances of this case than appears
in the Court's opinion.
Palazzolo, an employee of Ryan, the stevedore, was injured while
unloading cargo on a ship owned by the respondent, Pan-Atlantic
Steamship Corporation. As authorized by § 33, Palazzolo elected to
sue the shipowner, rather than accept a compensation award. In his
Page 350 U. S. 136
he charged that his injury was solely due to the negligent
manner in which a number of heavy rolls of paper pulp had been
stowed, or to the resulting unseaworthiness of the vessel. One of
these rolls weighing about 3,200 pounds had broken loose from its
position and seriously injured Palazzolo. The shipowner answered,
denying the allegations of negligence and unseaworthiness. At the
same time the shipowner filed a complaint of its own against Ryan,
the stevedore, alleging that any injury Palazzolo had received was
solely attributable to the negligent manner in which the
stevedore's employees had stowed the rolls of pulp. On this basis,
the shipowner asked the court to compel the stevedore to reimburse
the shipowner for any judgment Palazzolo might obtain against the
shipowner. Palazzolo's case against the shipowner was submitted to
a jury; the shipowner's claim for reimbursement by the stevedore
was tried by the judge largely on the same evidence and issues
submitted to the jury. The facts, in summary, were these:
The stevedore's employees loaded the rolls of pulp in
Georgetown, South Carolina, and, four or five days later, different
employees of the same stevedore unloaded them in New York. This was
pursuant to a general contract under which Ryan had agreed to
perform the shipowner's stevedoring services along the Atlantic and
Gulf coasts. The terms of the contract were set out in written
memorandums prepared by the shipowner and agreed to by the
stevedore. These memorandums contained a simple agreement to do the
stevedoring for an agreed compensation plus, in some circumstances,
cost of the stevedore's insurance. There was nothing further from
which it could possibly be inferred that Ryan would be under a duty
to indemnify the shipowner for losses resulting from any negligent
stowage by Ryan's employees. To prevent injuries to cargo, crew and
Page 350 U. S. 137
is necessary and customary to put some kind of props or supports
under or against the heavy pulp rolls to keep them stationary until
such time as they are unloaded. Some witnesses testified that a
thick, heavy, strong piece of lumber cut into a special wedge
shape, called a "chock," is a satisfactory kind of support under
the rolls. Failure to use "chocks" may, as testified by one of the
ship's officers, permit the rolls to run "rampant." Other witnesses
testified that, in addition to chocking, safety required that
wooden floors be placed between the layers of rolls. All agreed,
however, that indiscriminate scraps of wood called "dunnage" are
wholly inadequate supports. All but one witness who testified swore
that the roll that broke loose and injured Palazzolo in New York
had nothing but "dunnage" under or against it. The lone exception
was the ship's officer who swore that he saw wedges under the rolls
in New York. No one testified that wooden floors were used, or that
they were made available by the shipowner. There was testimony that
this shipowner never used chocks or wooden flooring, and that, in
New York, the longshoremen had looked for chocks, but none were to
be found on the ship. An officer of the shipowner testified that he
was on the ship in Georgetown, South Carolina, while it was being
loaded; that it was his primary duty to watch and see that the
rolls were properly stowed and chocked; that the did watch; that
chocks were available as part of the ship's "gear"; that he saw
chocks, not dunnage, put under the rolls; that had any attempt been
made to stow the rolls without using chocks, he would have tried to
stop the stevedore; that
"the stevedores and the chief officer and the mate on watch
generally cooperate and work together in the stowage in the overall
stowage of the cargo."
Thus, the uncontradicted testimony of the ship's officer was
sufficient to support a finding that he as a representative of the
ship actively joined in stowing the rolls in the way in
Page 350 U. S. 138
which they arrived at New York. And other evidence was
sufficient to support a finding that the cargo arrived in New York
unprotected by chocks.
These issues were properly submitted to the jury by the judge in
his charge. He told the jury that it could not find the ship
unseaworthy on account of the way in which the goods were unloaded
in New York. The issue thus revolved around stowage in South
Carolina which was actively supervised by the ship's officers. The
court submitted to the jury the questions, among others, as to
whether the ship had available for use proper equipment to stow
these dangerous rolls, and whether the ship's officers were guilty
of negligent loading and stowage in South Carolina. The jury gave
Palazzolo a verdict for $75,000. The trial judge found, in deciding
the shipowner's indemnity claim against the stevedore, that the
ship's officer present at the stowage "did not properly perform his
admitted duty to supervise the safe and careful loading of the
vessel," although he had "authority to remedy the condition or halt
the work." 111 F.
, 507. He concluded from this and other findings
] that the ship and
the stevedore were "joint tortfeasors," and therefore declined to
order the stevedore to reimburse the shipowner.
The Court of Appeals held that there was adequate evidence to
support the jury's finding that the shipowner was negligent and
that the ship was unseaworthy because of the defectively stowed
rolls. That court nevertheless held that the stevedore had to
reimburse the shipowner for its loss despite the findings of the
jury and the trial court that the loss occurred because of the
Page 350 U. S. 139
negligence. [Footnote 2/3
Court of Appeals justified imposing payment of the $75,000 verdict
on the stevedore on the ground that Palazzolo's injury was due to
the "sole," "primary," or "active" negligence of the stevedore's
employees. But the court's suggestion that the injury could have
been due to the "sole" negligence of the stevedore is answered by
the part of the court's opinion holding that there was adequate
evidence to support the jury and trial court findings that the
shipowner itself was negligent. Use of the words "primary" and
"active" seems to indicate that the Court of Appeals believed it
should look at this cold record and find for itself whether the
stevedore's employees or the ship's employees were guilty of this
type of negligence. I do not agree that the Court of Appeals should
make such findings. And if the Court of Appeals' cryptic statements
about "sole," "active," and "primary" can be considered as
upsetting any of the findings of the trial court, I think the Court
of Appeals' action should be set aside as clearly erroneous.
McAllister v. United States, 348 U. S.
I have set out the evidence in some detail because I think it
shows almost beyond doubt that this stevedoring company is being
required to pay a $75,000 verdict "on account of" injuries to an
employee received in the line of that employee's duties. This is at
least $60,000 more than it would have to pay under the
Page 350 U. S. 140
Act. That Act was revolutionary in its field. It took away from
longshoremen the right to sue their employers for negligence, and
substituted a fixed schedule of compensation for injuries
regardless of fault. Many workers and employers opposed the
compensation scheme. The workers deplored loss of their chance to
get big tort verdicts. But Congress thought it best to give them a
more certain and less expensive recovery, even though far less in
amount than some tort recoveries might be. Many employers preferred
to take their chance on defeating employees' damage suits under the
old tort system. The idea of "liability without fault" was
abhorrent to them. Congress weighed the conflicting interests of
employers and employees and struck what was considered to be a fair
and constitutional balance. [Footnote
] Injured employees thereby lost their chance to get large
tort verdicts against their employers, but gained the right to get
a sure though frequently a more modest recovery. However, § 33 did
leave employees a chance to recover extra tort damages from third
persons who negligently injured them. And, while Congress imposed
absolute liability on employers, they were also accorded
counterbalancing advantages. They were no longer to be subjected to
the hazards of large tort verdicts. Under no circumstances were
they to be held liable to their own employees for more than the
compensation clearly fixed in the Act. Thus, employers were given
every reason to believe they could buy their insurance and make
other business arrangements on the basis of the limited
Compensation Act liability. More than that, § 33 of the Act also
provides that, for compensation paid an employee, an employer shall
himself be reimbursed or indemnified out of any money collected as
a result of an employee's claim for negligent injury by a
Page 350 U. S. 141
third person. But the end result here is that this employer is
actually mulcted in damages because its employee successfully
prosecuted a third-party action. Liability is thus imposed because
of the negligence of the employer's other employees. This the Act
forbids. Whether called "common law indemnity," "contribution,"
"subrogation," or any other name, the result is precisely the same.
The employer has to pay more "on account of" an injury to his
employee than Congress said he should
I agree, of course, that, if the employer here had made a
contract, oral or written, agreeing to hold this shipowner harmless
or to indemnify the shipowner against liability for injuries to
petitioner's employees caused by the shipowner's negligence in
whole or in part, the contract would have been valid and indemnity
could have been obtained. For the Longshoremen's Act does not
forbid employers under it to make independent agreements to
indemnify others. But I think there is not the slightest support in
this record for a finding that any such contract was made. No such
allegation was made in the shipowner's complaint. And the
shipowner's counsel was careful to stipulate during the course of
the trial that his action was not based on a contract but on common
law indemnity. [Footnote 2/5
recognize that common law indemnity may
Page 350 U. S. 142
sometimes arise where two people commit a tort or wrong which
hurts the same person. As between wrongdoers, the courts will,
under some circumstances, impose the total liability on the
"primary" or "active" wrongdoer, apparently meaning the wrongdoer
the court deems to be the most negligent. But indemnity so imposed
is plainly "on account of" the negligence of the wrongdoer or his
employees. The Act expressly forbids such a recovery by "anyone"
from a stevedoring company "on account" of an injury to one of its
longshoremen. Plainly, common law indemnity should not be used to
fasten such a liability on a stevedoring company. I suppose it is
for this reason that the Court purports to find an actual contract
to indemnify, and thus decides the case on an issue neither
presented in the complaint nor considered by the trial court.
A genuine contract, as distinguished from a liability imposed by
law, sometimes called a "quasi
-contract," requires mutual
agreement of the parties. It is for this reason that the courts
have frequently said that the cardinal rule in the interpretation
of contracts is that the intention of the parties should be
ascertained and enforced. [Footnote
] And courts do not ordinarily stretch language in order
Page 350 U. S. 143
find that one person has agreed to indemnify another when the
latter negligently hurts someone. [Footnote 2/7
] Special caution should be used in
construing contracts so as to impose indemnity liability on
companies not engaged in the business of writing indemnity
I think there is not a shred of evidence to support the Court's
inference that this stevedore voluntarily agreed to give up the
limited liability which the Longshoremen's Act was deliberately
designed to afford. The Court finds nothing to support such a
conclusion except that the stevedore agreed to do a stevedoring
job. From that, the Court implies that it was to do a good
workmanlike job. From there it takes the next step -- which should
be more difficult than it appears to be -- and says that the
stevedoring company also agreed to give up its immunity under the
Act and pay any judgments that might be rendered in favor of the
stevedore's employees against the shipowner for its negligence. The
precise scope of the indemnity which the Court finds the stevedore
intended to assume is left in doubt. Are we to assume that the
stevedore agreed to an unlimited liability for indemnity without
regard to the comparative or qualitative proportions of negligence
as between its employees and the employees of the shipowner? Are we
even to assume that the stevedore deliberately and intentionally
agreed to indemnify the shipowner upon a court's finding that the
stevedore's negligence was the "sole," "primary," or "active" cause
of injury? Findings of fact based on these standards are never
easy. And, in efforts to formulate a common law indemnity remedy,
courts themselves have groped considerably in trying to give
meaning to the terms "primary" and "active." Is an understanding of
the different nuances of "sole," "primary," and "active" to be
attributed to stevedoring companies in judicial rewriting of
Page 350 U. S. 144
work contracts so as to make them indemnity contracts? Surely,
before this Court determines the existence of a contract and the
scope of its coverage, the case should be sent back to the trial
court so that these issues could be determined after a full hearing
on the facts. The issues were not tried in the District Court and
not tried in the Court of Appeals. The issues have never been
tried. In American Stevedores v. Porello, 330 U.
, we remanded a case to the trial court for a
hearing on evidence as to the scope of a contract of indemnity even
though it was written. Here, there is not even an oral contract to
indemnify. Before creating a contract, it might be appropriate to
follow the course we did in Porello.
Or is the Court
rejecting this phase of Porello? Cf. Halcyon Lines v.
Haenn Ship Ceiling & Refitting Corp., 342 U.
, 342 U. S.
Finally, the Court's action here not only deprives the employer
of his limited liability, it makes the right of employees to
recover damages from third parties a barren promise. Section 33 of
the Act provides two ways for an injured employee to obtain damages
from a negligent third person: (1) The employee may elect to waive
statutory compensation from his employer and sue the negligent
third person directly for damages. (2) If the employee accepts a
compensation award, the employer may sue the third person as
statutory assignee of the employee's claim, but all the employer
recovers in excess of the amount of the compensation award must be
paid over to the employee. Palazzolo was able to make an election
and bring his own suit because his employer was financially
interested in the outcome of his case, and therefore advanced money
to Palazzolo to sustain him during his injury until his case
against the third party could be tried. The Court takes away all
incentive for employers to follow this course in the future.
Hereafter, stevedoring companies under circumstances like this
Page 350 U. S. 145
know that it is decidedly to their advantage that no third-party
actions be brought. An employer like Ryan will hereafter know that,
if he or his employee prosecutes a claim against a third party and
obtains a judgment for the employee's benefit, every dime of the
judgment will have to be paid by the employer himself. Human nature
and habits being what they are, employers will not be eager to
finance suits against themselves. Injured longshoremen are not
ordinarily wealthy enough to support themselves without work
pending the trial of lengthy lawsuits. Yet, if an employee accepts
a compensation award, only his employer can bring suit against the
third person, and the employer will not be overly anxious to sue
himself. It has been suggested that we can expect the courts to
protect employees under such circumstances. In other words, the
employee who had accepted compensation must go into court to
protect himself against his employer before he goes into court to
protect his claim against a third party who has negligently injured
him. I cannot believe Congress would have given employers such
complete control over these suits if it had thought the employers
could be held liable for everything recovered. The actual effect of
the Court's holding is this: the employer, as an assignee of an
employee's claim, will know that, if he wins a lawsuit, he loses a
lawsuit. This knowledge will not give him a yearning anxiety to
file suit. Even though he yields to the call of duty and files the
lawsuit, he might not be exceedingly anxious to write a good
complaint. His other pleadings might not be all that a zealous
lawyer would desire. Although the employer must pay the judgment,
his will be the opening argument to the jury. And when the last
word is said in the closing argument, it will be made by counsel
who knows that, if he persuades the jury to give his client a
verdict, his client will have to pay it. Counsel will also know
that, if he happens to lose the case, his client will
Page 350 U. S. 146
be the winner. Such is the state of affairs brought about by the
Court's holding that this employer intended to make a contract
which would subject him to the very liability that Congress had
There has been considerable disagreement in this Court and among
other courts about three of our recent holdings, Seas Shipping
Co. v. Sieracki, 328 U. S. 85
Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.,
342 U. S. 282
Pope & Talbot v. Hawn, 346 U.
. In each of these cases, a worker in the same
position as Palazzolo sued a shipowner alleging negligence and
unseaworthiness. Judgments were obtained against the shipowners. We
held in the Halcyon
case that the shipowner could not,
under the common law doctrine of "contribution," force injured
employees' employers to pay part of the judgment against the
shipowner. The Sieracki
reaffirmed in Pope & Talbot.
In that case, we refused
to permit a shipowner to shift part of his loss to the injured
person's employer on his argument that the employer, who was under
the Longshoremen's Act, negligently contributed to the injury. We
rejected the contention on the ground that, if accepted, it "would
frustrate this [Act's] purpose to protect employers who are
subjected to absolute liability by the Act." 346 U.S. at
346 U. S. 412
The Court's opinion today provides a way under which, by simple
change of words and remedial formulas, the results reached in our
three former cases can be undermined. Employees like Sieracki and
Palazzolo will find it practically impossible to get their cases
for injuries against third persons tried in a court. And a
shipowner who wants to shift liability wholly to a stevedoring
company can do so by a very simple method. He can allege that the
stevedoring company intentionally made a contract agreeing to
indemnify him under circumstances like those in this case; that
allegation will be automatically proved by simply establishing the
Page 350 U. S. 147
the stevedoring company contracted to do some work on the ship;
the result will be that the employer is wholly deprived of the
protection of limited liability which the Act was intended to
provide. And while this will be accomplished under the name of
"contract," it will really by achieved because the Court has
announced as an absolute principle of law that, without regard to
whether a stevedoring company intends to agree to indemnify, it has
so agreed if it agrees to do a job. Thus, by indirection, rights of
longshoremen and their employers recognized by this Court in
and Pope & Talbot
taken away. In effect, the Sieracki
case is rejected.
I would reverse this case.
44 Stat. 1424, as amended, 33 U.S.C. § 901 et seq.
The trial court also found that the ship's officer, "in the
exercise of reasonable care, should have discovered and corrected"
the defective stowage conditions. Had this been the only ship's
negligence found, it might be material in considering the question
of common law indemnity. But this Court relies on contractual
Even though the question of unseaworthiness was also submitted
to the jury, it depended wholly upon whether there was negligent
stowage. Under the undisputed testimony of the ship's officer, the
jury and judge had to find that the shipowner was guilty of
negligence if the stevedore was. Moreover, if the shipowner failed
to provide the proper gear in the way of chocks or lumber, the
shipowner was guilty of negligence whether the stevedore was or
not. In this case, therefore, the shipowner's negligence and
unseaworthiness were one and the same thing. And if the shipowner
failed to supply needed gear in the way of chocks or lumber, it
would have been permissible to find that this was the "sole" cause
of Palazzolo's injuries.
See Crowell v. Benson, 285 U. S.
, 285 U. S. 37
New York Central R. Co. v. White, 243 U.
, 243 U. S.
-202. Cf. Ives v. South Buffalo R. Co.,
N.Y. 271, 94 N.E. 431.
"Mr. Behrens [counsel for shipowner]: This right of indemnity
alleged by Pan-Atlantic is a right of common law indemnity, rather
than a contractual provision. My question is how to get such facts
before your Honor."
"Your Honor, there was a motion for summary judgment in this
case by Ryan, to which was annexed the exchange of correspondence
between Ryan and Pan-Atlantic, which is a contract."
"Now, the question is whether those documents should now be put
in evidence before your Honor, or whether your Honor will infer
from the absence of any proof on the subject that there was no
"Mr. Schwartz [counsel for Ryan]: I think we can agree and
stipulate between us that whatever contractual arrangement was made
between Pan-Atlantic and Ryan did not contain any expressed
provision for indemnity, and it is Mr. Behrens' position in this
matter that his claim over is based solely upon an implied right of
indemnity, as implied in law."
"Mr. Behrens: That is correct."
"Mr. Schwartz: I will stipulate that there is no contractual
provision for indemnity."
"Mr. Behrens: And I will so stipulate, if that is satisfactory
to your Honor."
"The Court: Very well."
See, e.g., 41 U. S.
16 Pet. 528, 41 U. S. 534
Canal Co. v.
15 Wall. 94.
cases collected in Note, 175 A.L.R. 8,