Petitioner brought this proceeding in a Federal District Court
under the Limited Liability Act, 46 U.S.C. §§ 181-196, to limit its
liability for claims growing out of a collision between
petitioner's tug and barge and a pleasure yacht. Suits previously
brought in state courts, by respondent for the death of her
husband, and by four other claimants for personal injuries and the
loss of the yacht, originally involved claims for damages
aggregating more than the value of petitioner's vessels and their
pending freight, but the aggregate amount recoverable on such
claims was reduced by stipulations and admiralty court orders to an
amount less than the value of the vessels and their pending
freight. The value of the vessels was undisputed; the claims were
fixed; there was no contention that there might be further claims;
the fund indubitably was sufficient to pay all claims in full; and
the admiralty court had dissolved its injunction against
respondent's suit in the state court.
in this situation, a concursus
that required by the orders heretofore entered in the limitation
proceeding is not necessary, and respondent may proceed with her
suit in the state court to determine petitioner's obligation to
respond in damages for the loss of her husband's life subject to
the continuing jurisdiction of the federal court to protect
petitioner's right to limited liability. Pp. 354 U. S.
(a) Where the fund paid into the proceedings by the offending
owner exceeds the claims made against it, there is no necessity for
the maintenance of the concourse. P. 354 U. S.
(b) The Act is not one of immunity from liability, and it
confers no privilege on the shipowner other than that granting him
limited liability. Pp. 354 U. S.
(c) In view of the reservation to such suitors of their common
law remedies by 28 U.S. C. § 1333, respondent must not be thwarted
in her attempt to employ her common law remedy in the state court,
where she may obtain trial by jury. P. 354 U. S.
(d) Maryland Casualty Co. v. Cushing, 347 U.
, distinguished. Pp. 354 U. S.
232 F.2d 573, 235 F.2d 783, affirmed.
Page 354 U. S. 148
MR. JUSTICE CLARK delivered the opinion of the Court.
This admiralty limitation proceeding resulted from a maritime
disaster in 1954. The aggregate amount of all of the claims filed
in the proceeding and for which the petitioner could be held liable
if found at fault is less than the value of petitioner's vessels
and their pending freight. The question presented is whether the
respondent, the principal claimant, may, under these circumstances,
proceed with her action in a state court, subject to the continuing
jurisdiction of the federal court to protect petitioner's right to
limited liability, to determine the obligation of the petitioner to
respond in damages for the loss of the life of her husband. We
agree with the disposition of the District Court as modified by the
Court of Appeals.
Respondent's husband was a passenger on the pleasure yacht,
which was involved in a collision on the
Hudson River on July 10, 1954, with petitioner's tug, Eastern
Cities, pushtowing petitioner's barge, L.T.C. No. 38.
capsized, and respondent's husband was drowned.
The other 10 persons on board the yacht were rescued. Respondent,
as her husband's administratrix, brought suit against the
petitioner in a New York state court claiming $500,000 damages for
the loss of her husband's life. She alleged that the loss was
caused by Lake Tankers' negligent operation of both its tug and its
barge. Actions by four other claimants were also commenced in the
New York state courts against the petitioner for damages for
personal injuries and for loss of the Blackstone.
Page 354 U. S. 149
Thereafter, Lake Tankers Corporation filed this proceeding in
admiralty in the United States District Court for the Southern
District of New York for exoneration from or limitation of
liability. As required by the statute authorizing limitation
proceedings, [Footnote 1
petitioner filed approved security. While the first bond was only
in the amount of $118,542.21, representing the petitioner's
interest in its tug alone, thereafter, a bond covering the barge in
the amount of $165,000 was filed. Appropriate restraining orders
were issued enjoining the prosecution or filing of any claims
against Lake Tankers except in the limitation proceeding. There is
no dispute in regard to the adequacy or correctness of the amount
of the two bonds.
After petitioner instituted the limitation proceeding, the
respondent filed a claim for $250,000 in it covering the same loss
asserted in her state court case. The 10 survivors, including those
who had filed suits in the state court, also filed their claims in
the limitation proceeding. These totaled only $9,525. All of the
claimants, including respondent, have relinquished all right to any
damage in excess of the amounts set forth in their respective
claims in the limitation proceeding and expressly limited their
recovery to those amounts. The respondent has amended her claim
further by allocating $100,000 of her alleged damage to the tug and
the remaining $150,000 to the barge. She has also filed
stipulations agreeing neither to increase these claims nor to enter
into a judgment in excess of these amounts, and she has waived any
claim of res judicata
relative to the issue of the
petitioner's right to limit liability if that issue should be
passed on in the state court proceeding. The District Court, on
application, then vacated the restraining order, since the total
fund exceeded the amount of the claims.
Page 354 U. S. 150
137 F. Supp. 311. The Court of Appeals for the Second Circuit
affirmed, entering an order, to which respondent has also agreed,
with respect to the state court suit, as follows:
"If claimant obtains a judgment in her state court suit for an
amount in excess of $100,000, an injunction will issue permanently
enjoining her from collecting such excess unless the judgment rests
on a special verdict allocating the amount as between the libelant
as owner of the tug and as owner of the barge respectively. Thus,
if the judgment exceeds $100,000 and the jury finds libelant liable
solely as owner of the tug, she will be enjoined from collecting
any excess. If the jury finds that the libelant is liable solely as
owner of the barge, she will be enjoined from collecting any amount
in excess of $150,000."
232 F.2d 573, 577.
On rehearing the Second Circuit, sitting en banc, reaffirmed its
decision. 235 F.2d 783. We granted certiorari to pass upon the
important jurisdictional question presented. 352 U.S. 914.
This Court has recently considered the cases which discuss the
historical background of the Limited Liability Act, R.S.
§§4281-4289, as amended, 46 U.S.C. §§ 181-196, in British
Transport Commission v. United States, ante,
p. 354 U. S. 129
was there pointed out that the Act was adopted primarily to
encourage the development of American merchant shipping. The first
section of the Act here involved contains its fundamental
provision, which declares that the liability for any damage arising
from a disaster at sea which is occasioned without the privity or
knowledge of the shipowner shall in no case exceed the value of the
vessel at fault together with her pending freight, 46 U.S.C. § 183.
As Mr. Justice Van Devanter stated for a unanimous Court in
Page 354 U. S. 151
Island Transportation Co., 233 U.
, 233 U. S. 351
"The succeeding sections are in the nature proceedings by which
the first is to be made effective. Therefore they should be so
construed as to bring them into correspondence with it."
Among these sections dealing with the mechanics of effecting
such limitation of liability is § 184, covering those incidents
where "the whole value of the vessel, and her freight for the
voyage, is not sufficient to make compensation to each of [the
claimants]." In that event, the section continues, "they shall
receive compensation from the owner of the vessel in proportion to
their respective losses, and, for that purpose,
owners "may take the appropriate proceedings in any court. . . ."
(Emphasis added.) The succeeding section provides that, in such an
event, the owner "may petition a district court of the United
States . . . for limitation of liability within the provisions of
this chapter. . . ." It further declares that, upon compliance with
its requirements, "all claims and proceedings against the owner
with respect to the matter in question shall cease." This provision
is implemented by Rule 51 of our Admiralty Rules, which spells out
in more detail the manner in which the owner of any vessel who
"shall desire to claim the benefit of limitation of liability . . .
" shall proceed. It is therefore crystal clear that the operation
of the Act is directed at misfortunes at sea where the losses
incurred exceed the value of the vessel and the pending freight.
And, as is pointed out in British Transport Commission,
where the fund created pursuant to the Act is
inadequate to cover all damages and the owner has sought the
protection of the Act, the issues arising from the disaster could
be litigated within the limitation proceeding. Otherwise the
purpose of the Act, i.e.,
limitation of the owner's
liability, might be frustrated. Only in this manner may there be a
marshalling of all of the statutory assets remaining after the
Page 354 U. S. 152
disaster and a concourse of claimants. In such a situation, it
matters not to the owner what the "take" of the individual claimant
may be from the proceeding, for, under the Act, his payment is
limited to the value of the vessel and the pending freight. He can
suffer no more in any event.
On the other hand, where the value of the vessel and the pending
freight, the fund paid into the proceeding by the offending owner,
exceeds the claims made against it, there is no necessity for the
maintenance of the concourse. This is not to say that
is not available where a vessel owner in good
faith believes the fund inadequate, but here there is no contention
that there might be further claims; the value of the vessels is
undisputed, and the claims are fixed; it follows indubitably that
the fund is sufficient to pay all claims in full. While it is true
that the claims, as initially filed in the state court, exceeded
the fund created in the limitation proceeding, still when the
admiralty court dissolved the injunction against the state suit,
these claims, as filed in and limited by stipulation and order of
the admiralty court in the limitation proceeding, aggregated less
than the fund. On appeal, the Court of Appeals placed even more
severe restrictions on the state court prosecution, thus insuring
beyond doubt that petitioner's right of limitation under the Act
was fully protected.
For us to expand the jurisdictional provisions of the Act to
prevent respondent from now proceeding in her state case would
transform the Act from a protective instrument to an offensive
weapon by which the shipowner could deprive suitors of their common
law rights even where the limitation fund is known to be more than
adequate to satisfy all demands upon it. The shipowner's right to
limit liability is not so boundless. The Act is not one of immunity
from liability, but of limitation of it, and we read no other
privilege for the shipowner into its language over and above that
granting him limited
Page 354 U. S. 153
liability. In fact, the Congress not only created the limitation
procedure for the primary purpose of apportioning the limitation
fund among the claimants where that fund was inadequate to pay the
claims in full, but it reserved to such suitors their common law
remedies. 63 Stat. 101, 28 U.S.C. § 1333. [Footnote 2
] In view of this explicit mandate from the
Congress, the respondent must not be thwarted in her attempt to
employ her common law remedy in the state court where she may
obtain trial by jury.
The state proceeding could have no possible effect on the
petitioner's claim for limited liability in the admiralty court.
and the provisions of the Act therefore do not control. Langnes
v. Green, 282 U. S. 531
282 U. S.
-540 (1931). It follows that there can be no reason
why a shipowner, under such conditions, should be treated any more
favorably than an airline, bus, or railroad company. None of them
can force a damage claimant to trial without a jury. They, too,
must suffer a multiplicity of suits. Likewise, the shipowner, so
long as his claim of limited liability is not jeopardized, is
subject to all common law remedies available against other parties
in damage actions. The Act, as we have said, was not adopted to
insulate shipowners from liability, but merely to limit it to the
value of the vessel and the pending freight. It is contended that
Maryland Casualty Co. v. Cushing, 347 U.
(1954), is to the contrary. While there was no
Page 354 U. S. 154
of the Court in that case, it involved an alleged clash between
Louisiana's direct action statute and the Act. The majority
concluded there was no clash. The amount of the claims there far
exceeded the value, if any, of the vessel and the pending freight.
The language in one opinion to the effect that concursus
is "the heart" of the limitation system therefore refers to those
cases where the claims exceed the value of the vessel and the
pending freight. In that event, as we have pointed out, the
is vital to the protection of the offending
owner's statutory right of limitation. But this is not to say that,
is not necessary to the protection of this
statutory right, it is nonetheless required.
We conclude that, in the situation here, a concursus
beyond that required by the orders heretofore entered in this case
is not necessary, and respondent may therefore proceed with her
state court suit.
MR. JUSTICE WHITTAKER took no part in the consideration or
decision of this case.
R.S. § 4285, as amended, 46 U.S.C. § 185.
The forerunner of the current section gave the District Courts
"Of all civil causes of admiralty and maritime jurisdiction,
saving to suitors in all cases the right of a common law remedy
where the common law is competent to give it. . . ."
42 Stat. 634, 28 U.S.C.(1946 ed.) § 41(3). As reenacted, it
reads, in pertinent part, that the District Courts have original
jurisdiction, exclusive of the courts in the States in "Any civil
case of admiralty or maritime jurisdiction, saving to suitors in
all cases all other remedies to which they are otherwise entitled."
63 Stat. 101, 28 U.S.C. § 1333.
MR. JUSTICE HARLAN, whom MR. JUSTICE FRANKFURTER and MR. JUSTICE
BURTON join, dissenting.
I agree with the result reached by Judge Hincks in his
dissenting opinion below, In re Petition of Lake Tankers
232 F.2d 573, 579, and think that this judgment should
be reversed. Since federal limitation jurisdiction was properly
invoked, we should not permit it to be aborted by subsequent
actions by the claimants with a view to obtaining transfer of the
trial of their claims to the state courts. At the time the
limitation proceeding was commenced, the total claims which had
been asserted in the several state court actions far exceeded the
value of both the vessels owned by the petitioner, and limitation
proceedings were required.
Page 354 U. S. 155
The steps subsequently taken by the claimants to limit their
maximum recovery against the petitioner should no more be allowed
to defeat or impair the full effectiveness of the limitation
proceeding than would a subsequent reduction in the amount involved
be permitted to defeat a diversity jurisdiction which had initially
been properly invoked. See St. Paul Mercury Indemnity Co. v.
Red Cab Co., 303 U. S. 283