1. The Act of March 3, 1851, c. 43, reproduced in the Revised
Statutes in secs. 4282 &c., applies to owners of foreign as
well as domestic vessels, and to acts done on the high seas as well
as in waters of the United States,
except when a collision occurs between two vessels of the same
foreign nation, or perhaps of two foreign nations having the same
maritime law.
2. The maritime law of the United States, as found in the
statute, is the same as the general maritime law of Europe, and is
different from that of Great Britain in this, that the former
gauges the liability by the value of the ship and freight after
loss or injury, and the latter by their value before the loss or
injury, not exceeding �16 per ton.
3. The maritime law is only so far operative as law in any
country as it is adopted by the laws and usages of that country.
The principles laid down on this subject in
Norwich
Company v. Wright, 13 Wall. 104, and in
The Lottawana,
21 Wall. 558, reasserted and affirmed.
4. The courts of every country will administer justice according
to its laws unless a different law be shown to apply, and this rule
applies to transactions taking place on the high seas. If a
collision occur on the high seas between two vessels, controversies
arising therefrom will be governed in the courts of this country by
our laws unless the two colliding slips belong to the same foreign
country, or perhaps to different countries using the same law, when
they will be governed by the laws of the country to which they
belong.
5. Shipowners may avail themselves of the defense of limited
responsibility by answer or plea as well as by the form of
proceeding prescribed by the rules of this Court, at least so far
as to obtain protection against the libellants or plaintiffs in the
suit. Those rules were not intended to restrict them, but to aid
them in bringing into concourse those having claims against them
arising from the acts of the master or crew.
6. If the owners plead the statute, a decree may be made
requiring them to pay into court the limited amount for which they
are liable, and distributing
Page 105 U. S. 25
said amount
pro rata amongst the parties claiming
damages. Such a proceeding in a court of admiralty would be an
"appropriate proceeding" under the statute.
7. It is not necessary that shipowners should surrender and
transfer the ship in order to claim the benefit of the law. That is
only one mode of relief. They may plead their immunity and, if
found in or confessing fault, may abide a decree against them for
the value of ship and freight as found by the proofs.
8. The rule of damages in case of goods lost or destroyed on the
high seas by the fault of those in charge is the price or value of
the goods at the place of shipment, with all charges of lading,
insurance, and transportation, and interest at six percent per
annum, but without any allowance for anticipated profits.
9. When the goods have no market value at the place of shipment,
resort may be had to other means of ascertaining their actual
value, such as the price which they usually bring at the port of
destination, with a fair deduction for profits and charges.
The facts are stated in the opinion of the Court.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
The steamship
Scotland, belonging to the National Steam
Navigation Company, a corporation of Great Britain, sailed from New
York for Liverpool on the 1st of December, 1866, with freight and
passengers, and after reaching the high sea, opposite Fire Island
Light, ran into the American ship
Kate Dyer, bound from
Callao, in the Republic of Peru, to New York, laden with a cargo of
guano. The
Kate Dyer immediately sank, and ship and cargo
were totally lost. The steamship suffered so severely from the
collision that she put back, but was unable to get further than the
middle ground outside and south of Sandy Hook, where she also sank
and became a total loss, with the exception of some stripping of
ship's material, consisting of anchors, chains, rigging, and cabin
furniture got from her by the Coast Wrecking Company before she
went down. Libels
in personam were filed in the District
Court for
Page 105 U. S. 26
the Eastern District of New York against the Steam Navigation
Company by the owners of the
Kate Dyer, the Peruvian
government, owner of her cargo, and by a passenger and some of the
crew who lost certain effects by the sinking of the ship. Personal
service of process not being obtainable, the marshal attached
another vessel belonging to the steamship company, lying in the
port of New York, which was duly claimed and released on
stipulation, and the steamship company appeared and responded to
the libel. The answer admitted the collision but denied that the
Scotland was in fault, and further alleged as follows:
"Respondents, further answering, say that said steamer
Scotland was by said collision sunk and destroyed, and
that there is no liability
in personam against these
respondents for said loss of the
Kate Dyer."
Proofs being taken, the district court rendered a decree in
favor of the libellants which, on appeal to the circuit court, was
substantially affirmed. The owners of the
Kate Dyer were
awarded $56,000 with interest; the owners of the cargo $57,375 with
interest, and the passengers and crew upwards of $11,000 with
interest.
On the trial in the circuit court, the respondents, besides
contesting the question of fault and general liability, again
insisted upon the benefit of the limited liability law, and
proposed for adoption by the court a certain finding of fact and
conclusion of law looking to that end. The finding of fact was
substantially adopted by the court as follows::
"The steamer was, by reason of the said collision and in
consequence thereof, so injured that, although at once put about,
she could only reach the 'outer middle,' so called, on the west
side of the channel south of Sandy Hook, where she sank and became
a total loss except that a large amount of anchors, chains,
rigging, and cabin furniture, of the value of several thousand
dollars, was saved from her and delivered to the agent of the
respondents. She earned no freight, the voyage being broken up. The
passage money paid in advance by the passengers was $1,703.65; of
this, $225 was refunded to such of them as could not wait to be
transported by the respondents in another vessel of their line; the
remaining passengers were forwarded by the
Queen, and the
expense charged to the
Scotland.
Page 105 U. S. 27
Irrespective of the carriage of the passengers by the
Queen, the respondents paid return money as above, $225,
and the expenses of bringing the passengers to New York, and taking
care of them before they were reshipped, $566.83, in all, $791,83;
the balance of the passage-money, $911.82, was credited to the
Queen and charged to the
Scotland."
The conclusion of law proposed and insisted on by the
respondents as legitimately arising upon this fact was as follows,
to-wit:
"The liability of the respondents, as owners of the said
steamship
Scotland, did not extend beyond the value of
their interest in the vessel and her pending freight at the time of
the collision, and the vessel having been lost by the collision,
and no freight or passage money earned, the respondents are thereby
discharged from any liability on account thereof."
The circuit court, as before stated, refused any relief grounded
on the limited liability law, but made a decree against the
respondents for the total amount of damages sustained by the
various parties in interest. To this conclusion the respondents
excepted.
Both parties appealed from the decree, and the case is now
before us for review. The appeal of the libellants was based on
what they supposed to be an erroneous conclusion of the court in
reference to the allowance of interest, and the estimation of the
value of the cargo.
The principal question raised and argued on this appeal is
whether the steamship company is entitled to the benefit of a
limited responsibility equal to the value of the steamship and
freight after the collision occurred -- a liability which in this
case, as the vessel and freight were a total loss, would only
amount to the value of the articles saved by the wrecking company.
It is contended by the company that it is entitled to the benefit
of such limitation either under the general maritime law or under
the Act of Congress of March 3, 1851, c. 43. On the other side, it
is contended that the general maritime law on this subject (if
there be any) is not in force in this country, and that the benefit
of the act of Congress cannot be claimed by foreign vessels. It is
further contended by the
Page 105 U. S. 28
libellants that the steamship company, even if it might have had
the benefit of the rule, failed to take the proper steps for
obtaining it -- first in not filing a petition according to the
rules of this Court, and secondly in not surrendering the property
recovered from the wreck or its proceeds.
In the case of
Norwich Company v.
Wright, 13 Wall. 104, we had occasion to state that
the general maritime law of Europe only charges innocent owners to
the extent of their interest in the ship for the acts of the master
and crew, and that if the ship is lost, their liability is at an
end. This rule is laid down in several places in the ancient code
called the Consolato del Mare, and in many other authorities which
are quoted and commented upon by Judge Ware in the case of
The
Rebecca, Ware 187, and it is specifically formulated in
various national ordinances and codes, amongst others, in the
Marine Ordinance of Louis XIV, adopted in 1681. Emerigon, in his
treatise of Contracts "a la Grosse," says:
"The owners of the ship are bound
in solidum by
everything which the captain does in the course of the voyage for
the promotion of the voyage. . . . But this action
in
solidum does not exist against the owners farther than
according to the interest which they have in the body of the ship;
hence, if the ship perish or if they abandon their interest, they
are no longer liable for anything. It is thus that the maritime
laws of the Middle Age have directed; such is the law which is
observed in the North, and such is the regulation of our own
ordinance,"
and he refers to the Consolato and other authorities. The text
of the French ordinance, which is regarded as merely formulating
the old customary law, is as follows: "The owners of ships are
responsible for the acts of the master, but they become discharged
therefrom by abandoning the ship and freight."
But whilst this is the rule of the general maritime law of
Europe, it was not received as law in England nor in this country
until made so by statute. The English statutes, indeed, have not
yet adopted to its full extent the maritime law on this subject.
They make the owners responsible to the value of ship and freight
at the time of the injury -- that is, immediately before the injury
-- although the ship be destroyed or injured by the same act or
afterwards in the same voyage,
Page 105 U. S. 29
whilst our law adopts the maritime rule of graduating the
liability by the value of the ship after the injury, as she comes
back into port, and the freight actually earned, and enables the
owners to avoid all responsibility by giving up ship and freight,
if still in existence, in whatever condition the ship may be, and,
without such surrender, subjects them only to a responsibility
equivalent to the value of the ship and freight as rescued from the
disaster.
But whilst the rule adopted by Congress is the same as the rule
of the general maritime law, its efficacy as a rule depends upon
the statute, and not upon any inherent force of the maritime law.
As explained in
The Lottawana,
21 Wall. 558, the maritime law is only so far operative as law in
any country as it is adopted by the laws and usages of that
country, and this particular rule of the maritime law had never
been adopted in this country until it was enacted by statute.
Therefore, whilst it is now a part of our maritime law, it is
nevertheless statute law, and must be interpreted and administered
as such. Then does it govern the present case?
In administering justice between parties, it is essential to
know by what law or code or system of laws their mutual rights are
to be determined. When they arise in a particular country or state,
they are generally to be determined by the laws of that state.
Those laws pervade all transactions which take place where they
prevail, and give them their color and legal effect. Hence if a
collision should occur in British waters, at least between British
ships, and the injured party should seek relief in our courts, we
would administer justice according to the British law so far as the
rights and liabilities of the parties were concerned, provided it
were shown what that law was. If not shown, we would apply our own
law to the case. In the French or Dutch tribunals, they would do
the same. But if a collision occurs on the high seas, where the law
of no particular state has exclusive force, but all are equal, any
forum called upon to settle the rights of the parties would
prima facie determine them by its own law as presumptively
expressing the rules of justice; but if the contesting vessels
belonged to the same foreign nation, the court would assume that
they were subject to the law of their nation carried under
Page 105 U. S. 30
their common flag, and would determine the controversy
accordingly. If they belonged to different nations, having
different laws, since it would be unjust to apply the laws of
either to the exclusion of the other, the law of the forum -- that
is, the maritime law as received and practiced therein -- would
properly furnish the rule of decision. In all other cases, each
nation will also administer justice according to its own laws. And
it will do this without respect of persons, to the stranger as well
as to the citizen. If it be the legislative will that any
particular privilege should be enjoyed by its own citizens alone,
express provision will be made to that effect. Some laws, it is
true, are necessarily special in their application to domestic
ships, such as those relating to the forms of ownership, charter
party, and nationality; others follow the vessel wherever she goes
as the law of the flag, such as those which regulate the mutual
relations of master and crew and the power of the master to bind
the ship or her owners. But the great mass of the laws are, or are
intended to be, expressive of the rules of justice and right
applicable alike to all.
The act of Congress creating a limited responsibility of
shipowners in certain cases, first passed March 3, 1851, and
reproduced in secs. 4282-4289 of the Revised Statutes, is general
in its terms, extending to all owners of vessels without
distinction or discrimination. It declares that
"The liability of the owner of any vessel for any embezzlement,
loss, or destruction by any person of any property, goods, or
merchandise shipped or put on board of such vessel, or for any
loss, damage, or injury by collision, or for any act, matter, or
thing, loss, damage, or forfeiture, done, occasioned, or incurred,
without the privity or knowledge of such owner or owners shall in
no case exceed the amount or value of the interest of such owner in
such vessel, and her freight then pending."
This statute declares the rule which the lawmaking power of this
country regards as most just to be applied in maritime cases. The
great carrying trade by land is governed by substantially the same
principle, being in the hands of corporate associations whose
members are not personally liable for acts of the employees, but
risk only the amount of their capital stock in the corporation. The
doctrine of
respondeat superior, it is true, applies to
the corporations
Page 105 U. S. 31
themselves; but that does not interfere with the personal
immunity of the shareholders. Whenever the public interest requires
the employment of a great aggregation of capital exposed to immense
risk, some limitation of responsibility is necessary in order that
men may be induced to contribute to the enterprise. As Grotius says
in reference to this very matter of shipowners, "Men would be
deterred from owning and operating ships if they were subject to
the fear of an indefinite liability for the acts of the master."
Jure B. & P., lib. 2, c. 11, s. 13.
But it is enough to say that the rule of limited responsibility
is now our maritime rule. It is the rule by which, through the act
of Congress, we have announced that we propose to administer
justice in maritime cases. We see no reason, in the absence of any
different law governing the case, why it should not be applied to
foreign ships as well as to our own whenever the parties choose to
resort to our courts for redress. Of course the rule must be
applied, if applied at all, as well when it operates against
foreign ships as when it operates in their favor.
English cases have been cited to show that the courts of that
country hold that their statutes prior to 1862, which in generality
of terms were similar to our own, did not apply to foreign ships.
See The Nostra Signora de los Dolores, 1 Dod. 290;
The
Carl Johan, cited in
The Dundee, 1 Hagg.Adm. 109,
113;
The Girolamo, 3 Hagg.Adm. 169, 186;
The
Zollverein, 1 Swa. 96;
Cope v. Doherty, 4 Kay &
J. 367;
S.C. 2 De G. & J. 614;
The General Iron
Screw Collier Co. v. Schurmanns, 1 John. & H. 180;
The
Wild Ranger, 1 Lush. 553. We have examined these cases. So far
as they stand on general grounds of argument, the most important
consideration seems to be this, that the British legislature cannot
be supposed to have intended to prescribe regulations to bind the
subjects of foreign states or to make for them a law of the high
sea, and that if it had so intended, it could not have done it.
This is very true. No nation has any such right. Each nation,
however, may declare what it will accept and, by its courts,
enforce as the law of the sea when parties choose to resort to its
forum for redress. And no persons subject to its jurisdiction or
seeking justice in
Page 105 U. S. 32
its courts can complain of the determination of their rights by
that law unless they can propound some other law by which they
ought to be judged, and this they cannot do except where both
parties belong to the same foreign nation, in which case, it is
true, they may well claim to have their controversy settled by
their own law. Perhaps a like claim might be made where the parties
belong to different nations having the same system of law. But
where they belong to the country in whose forum the litigation is
instituted, or to different countries having different systems of
law, the court will administer the maritime law as accepted and
used by its own sovereignty.
The English courts say that, as foreigners are not subject to
their law nor entitled to its benefits, they will resort to the
general law of general liability when foreigners are litigants
before them. Where do they find such general law? In the law of
nature or the civil or common law? Is not the maritime law, as
their own legislature or national authority has adopted it, as
imperative as either of these? Does it not, in the British judicial
conscience, stand for the law of nature or general justice? As for
the civil and common laws, they are only municipal laws where they
have the force of laws at all. The better grounds for the English
decisions seem to be the peculiar terms of the acts of Parliament
on the subject, and the supposed policy of those acts, as being
intended for the encouragement of the British marine. From these
considerations as grounds of construction, the conclusion may have
been properly deduced that the law was intended to be confined to
British ships. The question, it is true, has ceased to be of
practical importance in England since the act of 1862, 25 & 26
Vict., c. 63, by which the owners of any ship, British or foreign,
are not to be answerable, without their actual fault or privity,
for any loss or damage to person or property to an amount exceeding
�15 per ton of the ship's registered tonnage, or its equivalent in
case of foreign ships. But the former English decisions are thought
to have a bearing on our law because the acts of Parliament to
which they related, in their principal clauses, were conceived in
the same broad and general terms as our act of Congress. Some of
the clauses of the British acts, however, relating to registered
tonnage
Page 105 U. S. 33
and other particulars, admitted only a special application to
British ships, and perhaps these clauses did require a restricted
construction of the whole acts to such ships.
But there is no demand for such a narrow construction of our
statute, at least of that part of it which prescribes the general
rule of limited responsibility of shipowners. And public policy, in
our view, requires that the rules of the maritime law as accepted
by the United States should apply to all alike, as far as it can
properly be done. If there are any specific provisions of our law
which cannot be applied to foreigners or foreign ships, they are
not such as interfere with the operation of the general rule of
limited responsibility. That rule and the mode of enforcing it are
equally applicable to all. They are not restricted by the terms of
the statute to any nationality or domicile. We think they should
not be restricted by construction. Our opinion, therefore, is that
in this case, the National Steamship Company was entitled to the
benefit of the law of limited responsibility.
But it is objected that the appellants did not properly and in
due time claim the benefit of the law. Under this head, it is
strenuously contended that the appellants did not comply with the
rules of this Court adopted in December Term, 1871. Without
adverting to the fact that these rules were not in existence until
long after this litigation had been pending, we may say once for
all that they were not intended to restrict parties claiming the
benefit of the law, but to aid them. Some form of proceeding was
necessary to enable shipowners to bring into concourse the various
parties claiming damages against them for injuries sustained by
mishaps to the ship or cargo, where they were entitled, or
conceived themselves entitled, to the law of limited responsibility
and where they were subjected or liable to actions for damages at
the suit of the parties thus injured. The rules referred to were
adopted for the purpose of formulating a proceeding that would give
full protection to the shipowners in such a case. They were not
intended to prevent them from availing themselves of any other
remedy or process which the law itself might entitle them to adopt.
They were not intended to prevent a defense by way of answer to a
libel, or plea to an action, if the shipowners should deem
Page 105 U. S. 34
such a mode of pleading adequate to their protection. It is
obvious that in a case like the present, where all the parties
injured are represented as libellants or intervenors in the cause,
an answer setting up the defense of limited responsibility is fully
adequate to give the shipowners all the protection which they
need.
But it is objected that they did not follow the statute by
giving up and conveying to a trustee the strippings of the wreck
and the pending freight. It is sufficient to say that the law does
not require this. It contains two distinct and independent
provisions on the subject. One is that the shipowners shall be
liable only to the value of the ship and freight; the other is that
they may be discharged altogether by surrendering the ship and
freight. If they failed to avail themselves of the latter, they are
still entitled to the benefit of the former kind of relief. The
primary enactment, in sec. 4283, Rev.Stat., is that the liability
of the owner for any loss or damage, without his privity or
knowledge, shall in no case exceed the amount or value of his
interest in the vessel and her freight then pending. Two modes for
carrying out this law are then prescribed, one in sec. 4284, and
the other in sec. 4285. By sec. 4284, a
pro rata recovery
against the shipowner is given to the various parties injured "in
proportion to their respective losses," and it is added:
"for that purpose, the freighters and owners of the property,
and the owner of the vessel, or any of them, may take the
appropriate proceedings in any court, for the purpose of
apportioning the sum for which the owner of the vessel may be
liable, among the parties entitled thereto."
The other mode of attaining the benefit of the law is prescribed
by sec. 4285, which declares that
"It shall be deemed a sufficient compliance on the part of such
owner with the requirements of this title if he shall transfer his
interest in such vessel and freight, for the benefit of such
claimants, to a trustee, to be appointed by any court of competent
jurisdiction &c., from and after which transfer all claims and
proceedings against the owner shall cease."
This last proceeding the respondents did not see fit to adopt,
but that does not deprive them of the benefit of the preceding
section.
As to the form of proceeding necessary to give the
respondents
Page 105 U. S. 35
the benefit of sec. 4254, which declares that either party "may
take the appropriate proceedings in any court, for the purpose of
apportioning the sum for which the owner of the vessel may be
liable," what more "appropriate proceeding" could be taken for this
purpose, where all the parties are before a court of admiralty, and
where the shipowners plead their exemption under the statute, than
to give a decree against them for the amount of their liability,
and to distribute the sum amongst the parties entitled to it?
It seems to us that no additional rules are necessary to attain
the object of the law in the case. It is plain enough to execute
itself. If there are parties not represented in the suit who have
claims for damages, it is the respondents' fault for not bringing
them in, as they might have done after the rules of 1871 were
adopted, by pursuing the remedy pointed out in those rules. But as
to the actual libellants and intervenors in the suit, there is no
reason in the world why the respondents should not be decreed to
pay the value of the ship's strippings and remnants into court, nor
why such amount should not be distributed
pro rata amongst
the claimants.
We think that this should have been done. If any further
inquiries are necessary to be made in order to ascertain the proper
amount to be paid by the respondents, as depending upon the value
of the articles saved, including freight or passage money realized,
the court below can institute them in a proper way.
The question raised as to the rule of damages which should be
adopted in estimating the actual loss of the owners of the guano
was properly decided by the circuit court. The rule is the prime
cost or market value of the cargo at the place of shipment, with
all charges of lading and transportation, including insurance and
interest, but without any allowance for anticipated profits. When,
as in this case, the goods have no ascertainable market value at
the place of shipment, the guano being a natural deposit owned by
the Peruvian government, indirect means must be resorted to for the
purpose of ascertaining the real value at that place. The circuit
court had the evidence of an experienced merchant on this subject,
who based his estimate upon the price for which the goods were
Page 105 U. S. 36
usually sold in New York, with a fair deduction for profits and
expenses of every kind. Under the circumstances of the case, we do
not see that any juster method could have been adopted. The rate of
interest allowed, six percent per annum, was the proper rate in
such a case.
See The Vaughan &
Telegraph, 14 Wall. 258;
Murray v.
Charming Betsey, 2 Cranch 64;
The Anna
Maria, 2 Wheat. 327;
The
Amiable Nancy, 3 Wheat. 546;
Smith v.
Condry, 1 How. 28;
Williamson
v. Barrett, 13 How. 101.
In conclusion, our decision is that, as no error has been shown
in any part of the decree below except on the question of limited
responsibility, the same is in all respects affirmed with that
exception, and for the error in that respect the decree of the
circuit court must be reversed so far as it condemns the
respondents to pay the whole amount of damage sustained by the
libellants and intervenors, and the cause must be remanded with
instructions to modify the decree and take such further proceedings
as may be necessary to carry out the principles laid down in this
opinion.
As to the costs of the litigation up to the time the appeal was
taken to this Court, the decree of the circuit court will not be
disturbed, inasmuch as the respondents did not place themselves
alone on the defense of limited responsibility, but contested the
question of fault and any liability whatever, which was found
against them.
As to the costs of this appeal, we think that no costs should be
decreed to either party against the other. The question before the
circuit court was a new one upon which there was wide room for
difference of opinion, and neither court nor parties had any
precedents to guide or direct them as to the mode of proceeding.
Therefore each party will be decreed to pay their own costs on this
appeal.
MR. JUSTICE MATTHEWS and MR. JUSTICE GRAY did not sit in this
case nor take any part in deciding it.