The Atlas, 93 U.S. 302 (1876)

U.S. Supreme Court

The Atlas, 93 U.S. 302 (1876) The Atlas

93 U.S. 302

CROSS-APPEALS FROM THE CIRCUIT COURT OF THE UNITED

STATES FOR THE EASTERN DISTRICT OF NEW YORK

Syllabus

1. Owners of a ship are not liable, under existing laws, for any loss, damage, or injury by a collision occasioned without their privity or knowledge beyond the amount of their interest in such ship and her cargo at the time the collision occurred.

2. The true measure of compensation to an innocent party in a case of collision is damages to the full amount of loss actually suffered by him.

3. The shipper or consignee of the cargo of a vessel, being innocent of all wrong, bears no proportion of the loss resulting from a collision. He may pursue his remedy at common law, or in admiralty, by a proceeding in rem, or

Page 93 U. S. 303

by libel in personam against the owner of either or both of the offending vessels.

4. A collision between two vessels which were at fault resulted in the loss of the cargo of a third vessel which was not at fault. Its owner proceeded in rem against one of the offending vessels. Held that he was entitled to a decree against it for the entire amount of his damages.

This is a libel against the steamboat Atlas by the Phoenix Insurance Company, for damages resulting from a collision between the Atlas and the steam tug Kate, whereby a canal boat, in tow of the latter, was sunk and her cargo, of which the company was the insurer, was lost and destroyed.

The district court found that the collision was caused by the mutual fault of the Atlas and Kate, and decreed that the libellant recover against the Atlas one-half of the damages sustained.

Both parties appealed, and, the circuit court having affirmed the decree, they appealed here, and filed a written stipulation as follows:

"1. The appeal taken by the claimants to this Court from the decree of the United States Circuit Court for the Southern District of New York is waived, so as to bring up before the court, on the argument of this cause on the cross-appeals, only the question of law as to whether libellants are entitled to recover the whole amount of the damages, instead of one-half."

"2. The parties agree that the collision mentioned in the libel and proceedings in this cause occurred by the mutual fault of the steamboats Atlas and Kate."

"3. The libellants waive and abandon the assignment of error and the claim that the decree of the circuit court should be reversed on the ground that the Atlas only was in fault, and rely only on the assignment of error that the decree should have been for the whole amount of the damages sustained by them, instead of for only a moiety thereof, and the only question to be submitted to the court is the question of law, whether the Atlas is liable for the whole amount of libellants' damages. "

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MR. JUSTICE CLIFFORD delivered the opinion of the Court.

Owners of ships and vessels are not liable under existing laws for any loss, damage, or injury by collision if occasioned without their privity or knowledge, beyond the amount of their interest in such ship or vessel and her freight pending at the time the collision occurred.

Subject to that provision in the act of Congress, the damages which the owner of the injured vessel is entitled to recover are estimated in the same manner as in suits for injuries to other personal property, and the claim for compensation may in certain cases extend to the loss of freight, necessary expenses in making repairs, and unavoidable detention.

Restitutio in integrum is the leading maxim in such cases, and where repairs are practicable, the rule followed by the admiralty courts in such a case is that the damages assessed

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against the respondent shall be sufficient to restore the injured vessel to the condition in which she was at the time the injury was inflicted. The Clyde, Swabey 24; The Gazelle, 2 W.Rob. 280; The Baltimore, 8 Wall. 385; Williams & Bruce, Prac. 77; 1 Pars. on Ship. 538; The Pactolus, Swabey 174.

Sufficient appears in the record to show that the libellants became the insurers of the cargo of the canal boat named in the libel, consisting of linseed, in the sum of $14,500, for a voyage from the port of New York to the port of New Brunswick, in the State of New Jersey; that the canal boat, with her cargo on board, was taken in tow at the port of departure by the steam tug called the Kate; that the steam tug, with her tow, including the canal boat and two other vessels, proceeded in safety to New Brighton, where the whole flotilla remained until the next morning, when they started for the port of destination, the steam tug heading northwest by north and taking her course across the kills directly for Port Johnson, on the Jersey shore; that the steam tug with the canal boat and the two other vessels in tow kept that course until she was within one hundred and fifty yards of the shore, when the master, being then in the pilot house, heard the whistle of a steamboat about one-tenth of a mile distant; that it was a single blast, being the signal that the respective boats as they approached should pass to port; that the master of the steam tug having the canal boat in tow answered the signal by blowing his whistle twice, which is the proper signal that the boats should pass to starboard, it being unsafe for him, owing to the state of the tide and the conformation of the adjacent shore, to attempt to pass the approaching vessel on the port side; that the signal given was the proper one; and the charge is that the master of the steam tug immediately starboarded his helm, and that the approaching vessel, which proved to be the steam tug the Atlas, within a minute ran into the steam tug having the canal boat in tow, with great force and violence, staving her in from her plank-shear to the third plank below her water line, which caused the steam tug and canal boat she had in tow to sink, whereby the cargo of the canal boat became a total loss; and the libellants also charge that the loss was wholly occasioned through the fault, negligence, and want of skill of

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those in charge of the approaching steam tug. The Friends, 4 Moore, P.C.C. 319.

Process was served and the claimants appeared and filed an answer, setting up the several defenses alleged in the record. Testimony was taken on both sides and, the parties having been fully heard, the district court entered an interlocutory decree that the damages claimed by the libellant were caused by the mutual fault of the steam tug Kate and the steamboat Atlas, and that the libellants do recover against the steamboat Atlas one-half of the damages by them sustained by reason of the collision, and that the cause be referred to a commissioner to ascertain the amount.

Pursuant to the decretal order, the commissioner reported that the whole amount of the damages to the date of the report was $13,617.02, and that the libellants were entitled to recover one-half of that sum, to wit, $6,808.51. Exceptions were filed by the libellants to that report upon the ground that they are entitled to the entire amount of the damages sustained, but the court overruled the exception, confirmed the report, and entered a final decree in conformity with the report. Both parties appealed to the circuit court, where, the parties having been again fully heard, the circuit court entered a final decree affirming the decree of the district court, and both parties appealed to this Court.

Since the appeal was entered here, the parties have been fully heard, and they have filed in the cause a written stipulation to the effect following:

1. That the claimants insist only that the decree of the circuit court should be affirmed, the parties agreeing that the collision occurred through the mutual fault of the steamboats Atlas and Kate.

2. That the libellants admit that both the steamboats were in fault, but insist that they are entitled to recover for their full loss, and that the decree, being for a moiety only, should be reversed on that account, and that a decree should be entered for the entire damages that the owners of the cargo of the canal boat sustained by the collision.

Other questions involved in the record being waived, the court will confine its attention to the single inquiry whether the ruling of the court below in overruling the exception of

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the libellants to the report of the commissioner is or is not correct.

Satisfaction to the libellant for the injury sustained is the true rule of damages in a cause of collision, by which is meant that the measure of compensation shall be equal to the amount of injury received, and that the same shall be calculated for the actual loss occasioned by the collision, upon the principle that the sufferer is entitled to complete indemnification for his loss, without any deduction for new materials used in making repairs, as is prescribed in the law of marine insurance. Complete recompense for the injury is required, nor is the guilty party in such a case entitled to deduct from the amount of the damages any sum which the libellant has received from an underwriter on account of the same injury, the rule being, that a wrongdoer in such a case cannot claim the benefit of the contract of insurance if effected by the person whose property he has injured. Maude & P. on Ship. (3d ed.) 465; Flanders on Ins. 591.

Instead of that, the law is well settled that the reception of the amount of the loss from the insurers is no bar to an action subsequently commenced against the wrongdoer to recover compensation for the injury occasioned by the collision. Mason v. Sainsbury, 3 Doug. 61.

Authorities to that effect are numerous, and it was expressly decided by the judges in Yates v. Whyte, 4 Bing.N.C. 272, that the defendants in such a case were not entitled to deduct from the amount of damages to be paid by them a sum of money paid to the plaintiff by insurers in respect of such damage.

None can recover compensation twice in respect of the same injury, but what the plaintiff recovers under his policy of insurance is not compensation for damages, but a payment under a contract independent of the claim against the wrongdoer, and the better opinion is that the principle which excludes double compensation does not strictly apply to obligations not in the same right. May on Ins. 555.

Compensation by the wrongdoer after payment by the insurers is not double compensation for the plain reason that insurance is an indemnity, and it is clear that the wrongdoers

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are first liable, and that the insurers, if they pay first, are entitled to be subrogated to the rights of the insured against the insurers.

Support to that proposition is found everywhere, and some of the authorities go further and decide that the suit against the wrongdoer for the benefit of the insurer must be prosecuted in the name of the injured party. Randall v. Cockran, 1 Ves.Sen. 90; Godsall v. Boldero, 9 East, 81; Irwing v. Richardson, 1 B. & Adol. 196; Case v. Davidson, 5 Maule & Selw. 81; Clark v. Blything, 2 Barn. & Cressw. 256.

Suppose that is so, still it cannot affect the question in this case, which is whether the decree should be for a moiety only of the damages occasioned by the collision, or for the entire amount. Waiving the question of parties, it is clear that the respondents are liable for one or the other of those amounts. 1 Park on Ins. (8th ed.) 330; Insurance Company v. Sainsbury, 3 Doug. 245; Yates v. Whyte, supra; 2 Marsh on Ins. (2d ed.) 794; 2 Park on Ins. (8th ed.) 969; 2 Phillips on Ins. (5th ed.), sec. 2001.

Beyond all doubt, the owners of a ship or vessel injured by collision may proceed to recover compensation either against the owners or against the master personally, or against the ship herself, at their election. The Volant, 1 W.Rob. 387; Maude & P. on Ship. (3d ed.) 466.

Argument to support that proposition is unnecessary, but it is equally well settled that the cargo which is on board the colliding vessel at the time the collision occurs is not liable for the damage done by the ship in which it is carried. The Victor, 1 Lush.Adm. 76.

Damage is sometimes said to be done by the ship, but that is a mere form of expression, the truth being that it is either done by the owner or by the master and crew employed by the owner, who is responsible for their conduct, because, being employed by the owner, they are his agents, but they are not the agents or servants of the owner of the cargo, and for that reason the cargo is not liable for the consequences of a collision.

Matters of fact need not be discussed in this case, as it is admitted by the parties that the collision occurred through the

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mutual fault of the steamboat Atlas and the steam tug Kate which had the canal boat in tow with her cargo on board. Both courts below gave the libellants a moiety of the damages ascertained by the commissioner, and the claimants insist that the decree of the circuit court is correct. On the other hand, the libellants insist that they are entitled to recover the entire damages occasioned by the collision, and that the decree of the circuit court should be reversed.

Disasters of the kind occur from different causes and under very different circumstances, and the rules of admiralty law applicable in the determination of such controversies vary to meet the varying circumstances which give rise to the accident. Judicial experience has given no better guide than that furnished by Lord Stowell, than whom no abler judge ever presided over the Admiralty Court of the parent country. Speaking of such disasters, he remarked to the effect that there were four possibilities under which an accident of the kind may occur. In the first place, it may happen without blame being imputable to either party, as where the loss is occasioned by a storm or any other vis major. In that case, the misfortune must be borne by the party on whom it happens to fall, the rule being that the party not injured is not responsible to the losing party in any degree. Secondly, a misfortune of the kind may arise when both parties are to blame, as where it appears that there has been a want of due diligence or of skill on both sides, and he adds that in such a case the rule of law is that the loss must be apportioned between them as having been occasioned by both. Thirdly, it may happen by the misconduct of the suffering party only, and then the rule is that the sufferer must bear his own burden. Lastly, he remarks that it may happen from the fault of the ship which ran the other down, and in that case the injured party is entitled to an entire compensation from the other. The Woodrop, 2 Dodson 85.

Freedom from fault is a good defense in a cause of collision against a claim for damage promoted by an injured party, and it entitles the promoter of such a suit to full compensation from the opposite party, if proved to be guilty. Where neither party is in fault and the damage was the result of unavoidable accident, the rule that the loss must be borne by the party on whom it

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fell is one of universal application. The Shannon, 1 W.Rob. 470; The Itinerant, 2 id. 243; The Locklibo, 3 id. 318; The Morning Light, 2 Wall. 560.

Under the second of the foregoing rules -- when both vessels are in fault -- the sums representing the damages are added together and the amount is equally divided between the parties, and that rule prevails in all cases where there is mutual fault, even though one of the vessels may have been much more in fault than the other. Fault being imputed to both vessels, and the charge being proved, the inquiry which was most to blame is immaterial, as the damages must be divided between the two according to the rule provided in the admiralty courts. Vaux v. Sheffer, 8 Moore, P.C.C. 87.

Attempt was made in the Court of Sessions in Scotland to establish an exception to that rule, and the court finding, in a case where both vessels were in fault, that the greater share of the blame rested on one, decided that her owners were liable for two-thirds of the damage. Maude & P. on Ship. (3d ed.) 470; Le Neve v. Shipping Co., 1 Shaw's Cas. 378.

Prompt appeal was taken from that decree to the House of Lords, where the decree was reversed upon the ground that the true rule was the one laid down by Lord Stowell that where a misfortune of the kind happens from the want of due diligence or skill on both sides, the loss must be apportioned between them as having been occasioned by the fault of both. Hay v. Le Neve, 2 Shaw's H. of L.Cas. 400; The Washington, 5 Jur. 1067.

Both vessels being in fault, the positive rule of the Court of Admiralty, says Lord Denman, requires the damage done to both ships to be added together and the combined amount to be equally divided between the owners of the two. De Vaux v. Salvador, 4 Ad. & El. 431.

Innocent parties in cases of the kind are entitled to full compensation, but the admiralty rule as between wrongdoers is that the combined amount of the damage shall be divided between the owners of the two offending vessels. Text writers of standard authority as well as courts have adopted the same rule, and hold that where both vessels are in fault, the loss must be apportioned between them as having been occasioned by the

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fault of both. Maclachlan on Ship. (2d ed.) 286; 1 Pars. on Ship. 527; Williams & Bruce, Prac. 71.

All of these writers and many others lay down the rule that where both parties are to blame, the loss must be apportioned between them, and the authors last cited say that the rule is founded upon the principle which from ancient times has been applied in the Admiralty Court that damage by a common fault shall be considered as a common loss. The Lima, 4 Jur.N.S. 147; The Aurora, Lush.Adm. 329.

Strict justice would require, said Dr. Lushington, that the burden of making good the loss should fall upon the two delinquents in proportion to their delinquency, but in practice the proportion is impossible to be ascertained. Such a rule, if adopted, would be utterly impracticable for the reason that the court cannot apportion the loss according to the quantum of neglect or culpability on the one side and the other; hence equal apportionment is the universal rule where there is mutual fault, even though the fault on one side may be much greater than the fault on the other. The Milan, Lush.Adm. 401; The Linda, 4 Jur.N.S. 147.

Courts and text writers in all or nearly all of these cases appear to have proceeded, throughout the period which they cover, upon the ground that the rule of apportionment requiring each party, where both are in fault, to bear a moiety of the loss, applies solely to the case of the wrongdoers, and that proof of entire innocence or freedom from fault is a good defense to every portion of a claim for damage, and that it entitles the promoter of a suit for such a claim to full compensation for his loss from the guilty party. Opposed to that conclusion is the case of The Milan, Lush. Adm. 401, in which Dr. Lushington remarks to the effect that the practice of the Court of Admiralty appears to have been uniform that where both ships are to blame, the owners of cargo equally with the owners of ships recover a moiety of their damages, except in cases where the statute prescribes a different rule, and the learned judge refers to the reported case of Hay v. Le Neve, 2 Shaw's Sc.App. 405, in support of the proposition.

Other cases are also referred to for the same purpose, but the reporter appends a note to the case that the other cases are

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not reported. Enough appears in that case to show that both ships were in fault -- the one for the want of lights and the other for the want of a sufficient lookout -- and the decree was that the whole of the damages sustained by the libellants for the ship and cargo should be borne equally by the litigant parties; but it was the owners of the injured ship who promoted the claim, and it does not appear that the question before the court here received any consideration at the bar or by the court.

Two admissions are made by the court in the case of the Milan, which it is important to notice, as they are undoubtedly correct and will afford much aid in disposing of the question involved in the present record:

1. That the owner of the cargo in such a controversy could recover for his whole loss in an action at law.

2. That the owner of the cargo in such a case is to be considered as a perfectly innocent party.

Nothing is more clear than the right of a plaintiff, having suffered such a loss, to sue in a common law action all the wrongdoers, or any one of them, at his election, and it is equally clear that if he did not contribute to the disaster, he is entitled to judgment in either case for the full amount of his loss. He may proceed against all the wrongdoers jointly or he may sue them all or any one of them separately, but if he sues them all jointly and has judgment, he cannot afterwards sue them separately, or if he sues one separately and has judgment, he cannot afterwards sue them all in a joint action, because the prior judgment against one is, in contemplation of law, an election as to that one to pursue his several remedy, but it is no bar to the suit for the same wrong against any one or more of the other wrongdoers. Murray v. Lovejoy, 2 Cliff. 196; s.c. 70 U. S. 3 Wall. 19; Smith v. Hines, 2 Sumn. 348; Webster v. Railroad, 38 N.Y. 261.

Acts wrongfully done by the cooperation and joint agency of several persons constitute all the parties wrongdoers, and they may be sued jointly or severally, and any one of them, said Spencer, C.J., is liable for the injury done by all if it appear either that they acted in concert or that the act of the individual sought to be charged ordinarily and naturally produced the acts of the others. Guile v. Swan, 19 Johns. 382.

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Confirmation of the second admission is not required, as sufficient has already been remarked to show that the proposition is correct and that it is universally approved.

Shippers having lost cargo by such a disaster may pursue their remedy by libel in personam against the owner of the offending vessel, or they may, at their election, proceed in an action at law either in the circuit court, if the parties are citizens of different states, or in a state court, as in other cases where the federal and state courts have concurrent jurisdiction. Steamboat Company v. Chase, 16 Wall. 533; The Belfast, 7 Wall. 644.

Suitors have a right to a common law remedy in all cases where the common law is competent to give it. Consignees or shippers injured in their property by collision may proceed in rem in the admiralty, or they may bring a suit in personam in the same jurisdiction, or they may elect not to go into admiralty at all, and may resort to their common law remedy in the state courts or in the circuit court of the United States, if they can make proper parties to give that court jurisdiction.

Common law remedies in cases of tort, as given in common law courts, and suits in personam in the admiralty courts of this country bear a strong resemblance to each other in respect to parties, and the effect of a recovery by the injured party against one or all of the wrongdoers, and the extent of redress to which in innocent party is entitled against the wrongdoer. Simpson v. Hand, 6 Whart. 321.

Different systems of pleading and modes of proceeding prevail in the two jurisdictions, and in some few respects there is a difference in the rules of evidence adopted in the admiralty court from those which prevail in common law actions. All know that the libel in the Admiralty Court takes the place of the declaration in an action at law, and that the answer is the substitute for the plea of the defendant.

Contributory negligence on the part of the libellant cannot defeat a recovery in collision cases if it appears that the other party might have prevented the disaster, and that he also did not practice due diligence, and was guilty of negligence, and failed to exercise proper skill and care in the management of his vessel. Proof of the kind will defeat a recovery at common

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law, but the rule in the admiralty is that the loss in such a case must be apportioned between the offending vessels as having been occasioned by the fault of both; but the rule of the common law and of the admiralty is the same where the suit is promoted by an innocent party, except that the moiety rule may be applied in the admiralty if all the parties are before the court and each of the wrongdoers is able to respond for his share of the damage. Subject to that qualification, the remedy of the innocent party is substantially the same in the admiralty as in an action at law, the rule being that in both he is entitled to an entire compensation from the wrongdoer for the injury suffered by the collision. Colegrove v. Railroad, 20 N.Y. 493; Catlin v. Hills, 8 C.B. 125; Vanderplank v. Miller, 1 Moo. & Mal. 169.

Goods shipped as cargo, and their owners, as in the case before the Court, are innocent of all wrong, and the owners of the cargo may sue the owners of one of the ships, or both, and they may sue at law or go into the admiralty, at their election, and, having proved their case, they are as much entitled to full compensation in the admiralty as they would have been if they had elected to pursue their common law remedy saved to them by the proviso contained in the ninth section of the Judiciary Act, 1 Stat. 77.

Co-wrongdoers not parties to the suit cannot be decreed to pay any portion of the damage adjudged to the libellant, nor is it a question in this case whether the party served may have process to compel the other wrongdoers to appear and respond to the alleged wrongful act.

Even suppose that the case of the Milan is a correct exposition of the admiralty law as administered in the jurisdiction where the decision was made, still it cannot control the question before the Court for the reason that the rule of practice here is different, as is clearly shown by the judgment of this Court delivered at the last term of the Court. The Alabama and The Game-cock, 92 U. S. 695.

Counsel of experience and ability attempted to maintain in that case the same theory as that now advanced in argument here by the appellees, and they cited The Milan, Lush. Adm. 403, The Atlas, 4 Ben. 28, S.C. 10 Blatch. 460, in support

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of the proposition which they desired the court to adopt. Suffice it to remark by the way of explanation that all the parties interested in the case then under argument were before the court, which is all that need be said in respect to the operation of such a theory if applied in a case where the parties interested were duly served and were present and it did not appear that each of the respondents was not able to respond for a moiety of the damages suffered by the owner of the cargo.

Contingencies are also portrayed in which it is conceded that the theory may be applied without serious injustice or inconvenience, but the court proceeds to say that it would seem to be just that the owner of the cargo who is supposed to be free from fault should recover the damage done thereto from those who caused it, adding that if he cannot recover from either of them such party's due share, he ought to be able to recover it from the other, and that the same reason for a division of the damage does not apply to the owner of the cargo as applies to the owners of the ships. Remarks are then made to show that the moiety rule is both just and expedient between the ships where both are in fault, but the court proceeds to say that if either is unable to pay his moiety of damage, there is no good reason why the owner of the cargo should not have a remedy over against the other, and finally remarks that the moiety rule was adopted for the better distribution of justice between wrongdoers, and that it ought not to be extended so far as to inflict positive loss to innocent parties. The Gregory, 9 Wall. 516.

Much care was taken in framing the decree in that case, which of itself shows to a demonstration that the court never intended to adopt a theory which would fail to give innocent parties full compensation suffered by a collision, and that they never meant to extend the moiety rule so as to do injustice to an innocent tow or to the owner of cargo. Such a result can never be sanctioned by the Justices of this Court so long as they adhere to the rule that when a third party has sustained an injury to his property from the cooperating consequences of two causes, though the persons producing them may not be in intentional concert to occasion such a result, the injured

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person is entitled to compensation for his loss from either one or both of them according to the circumstances of the incident. The New Philadelphia, 1 Black 76; Boyer v. Sturgis, 24 How. 122.

Except when both parties are to blame, the offending party can recover nothing, whether he pursues his remedy in the admiralty or at common law. Where both are to blame, neither can recover any thing at common law, but the admiralty requires each to suffer a moiety of the loss, to be ascertained in the manner already explained.

Parties without fault, such as shippers and consignees, bear no part of the loss in collision suits, and are entitled to full compensation for the damage which they suffer from the wrongdoers, and they may pursue their remedy in personam either at common law or in the admiralty against the wrongdoers or any one or more of them, whether they elect to proceed at law or in the admiralty courts.

Such a party is not required in any event to bear any portion of the loss suffered by others, the rule being that where the collision occurs exclusively from natural causes, without any fault of either of the colliding vessels, the loss shall rest where it happens to fall, on the principle that no one is responsible for such a disaster when produced by causes over which human skill and prudence can exercise no control.

Inevitable accident is a good defense in such a controversy where both vessels are free from blame, but it is utterly unavailing if either or both were in fault. Where the vessel of the respondent is alone in fault, the libellant is entitled to recover full compensation for his damages, and the rule is that if the vessel of the libellant is alone in fault, the decree must be for the respondent that the libel be dismissed.

Cases also arise where both vessels are in fault, and the repeated decisions of this Court have established the rule that in that contingency the damages shall be equally apportioned between the offending vessels as having been occasioned by the fault of both. The Catharine, 17 How. 177; The Sunnyside, 91 U. S. 216; The Continental, 14 Wall. 355; The Morning Light, 2 Wall. 560; The Pennsylvania, 24 How. 313.

Innocence entitles the loser to full compensation from the

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wrongdoer, and it is a good defense against all claims from those who have lost. Individual fault renders the party liable to the innocent loser, and is a complete answer to any claim made by the faulty party except in a case where there is mutual fault, in which case the rule is that the combined amount of the loss shall be equally apportioned between the offending vessels.

Decree reversed and cause remanded with directions to reverse the decree of the district court and enter a new decree in favor of the libellants for the entire damages as ascertained by the commissioner.

MR. JUSTICE BRADLEY did not sit in this case.