Petition for Writ of Certiorari — Gray v. Johansson

uTice-supreme Vour., U.S.

FILED

JUL 31 1961

‘RE Cm pry

Ec

no_2.7 7%

IN THE

Supreme Court of the United States

October Term, 1961

G. & H. TOWING COMPANY, Petitioner

VERSUS

EDWIN E. JOHANSSON, KANSAS CITY BRIDGE CO.,

MERRITT-CHAPMAN & SCOTT CORP., AND

PELICAN ISLAND DEVELOPMENT CORP.,

Respondents

PETITION FOR WRIT OF CERTIORARI

To the United States Court of Appeals

for the Fifth Circuit

ROYSTON, RAYZOR & COOK

Cotton Exchange Building

Galveston, Texas

ROBERT EIKEL

1910 Tennessee Building

ROBERT EIKEL, Houston 2, Texas

Of Counsel Attorneys for Petitioner

Alpbs Lew Brief Co., 402 M & M Bidg., Houston 2

a

SUBJECT INDEX

OPINIONS BELOW

JURISDICTION s

THE QUESTIONS PRESENTED FOR REVIEW

STATEMENT

REASONS FOR GRANTING THE WRIT

ARGUMENT

CONCLUSION

4

APPENDICES

I. Opinion of Court of Appeals

II. Opinion of District Court

II]. Judgment of the Court of Appeals

IV. Pertinent Provisions of the Contract for Tug Hire

V. The Entire Contract for Tug Hire

PAGE

LIST OF AUTHORITIES

CASES PAGE

Bisso v. Inland Waterways Corporation, 1955, 349 U.S. 85

a 3, 12, 13, 15, 19, 22

Charente Steamship Co. v. United States, 5 Cir., 1926, 12

F.2d 412 . 14, 26

Dampskibsselskabet Atalanta A/S v. United States, 5 Cir.,

31 F.2d 961, 1929 A.M.C. 855 4, 14, 26

Dougall v. Spokane, P. & S. Ry. Co., 9 Cir., 207 F.2d 843,

cert.den., 347 U.S. 944. 29

Fries v. United States, W.D. Ky., 76 F.Supp. 36, aff. 170

F.2d 726, cert.den., 336 U.S. 954 29

Gray, et al. v. Johansson, et al., 287 F.2d 852 2

Guy v. Donald, 203 U.S. 399 4, 14, 26

Homer Ramsdell Transportation Co. v. La Compagnie

Generale Transatlantique, 182 U.S. 406 . 26

Luria Bros. & Co., Inc. v. Eastern —— Co., 2 Cir., 1937,

89 F.2d 900... ; 18

McAllister v. United States, 348 US. 19 25

Moran Towing & Transp. Co. v. Nav. Lib. Triestina, 2 Cir.,

1937, 92 F.2d 37, 1937 A.M.C. 981, cert. den. 302 U.S. 744 24

Pennsylvania Railroad v. The Beatrice, 2 Cir., 1960, 275

I te ee er Se eva w pane cou ; 3, 13, 21, 24

Sherlock v. Alling, 93 US. 99 ° 14, 26

Standard Oil Co. v. Anderson, 212 US. 215 4,14, 29

States Marine Corporation of Delaware v. Victory Carriers,

Inc., 9 Cir., 1959, 272 F.2d 463 . 3, 13, 21, 24

Sun Oil Co. v. Dalzell — Co., 287 U.S. 291

24, 3, 4, 12, 13, 14, 15, 19, 23, 28

The China, 7 Wall. 53. 26

The Etona, S.D. N.Y., 64 F. 880, aff. 2 Cir., 71 F. 895 18

The Oregon, 158 U.S. 186 . 26

United States v. Chris Nielson, 349 U.S. 129 21, 3,18, 15, 22

UNITED STATES STATUTES

28 U.S.C. 1254(1) 2

FRERTS

IN THE

Supreme Court of the Anited States

October Term, 1961

G. & H. TOWING COMPANY, Pefitioner

VERSUS _

EDWIN E. JOHANSSON, KAI-SAS CITY BRIDGE CO.,

MERRITT-CHAPMAN & SCOTT CORP., AND

PELICAN ISLAND DEVELOPMENT CORP.,

Respondents

-PETITION FOR WRIT OF CERTIORARI

To the United States Court of Appeals

for the Fifth Circuit

G. & H. Towing Company, respondent, prays that a

writ of certiorari issue to review the judgment of the ,

United States Court of Appeals for the Fifth Circuit,

affirming the interlocutory decree of the United States

District Court for the Southern District of Texas in favor

of. the libellants-Edwin E. Johansson, Kansas City Bridge

Co., Merritt-Chapman & Scott Corp., and Pelican Island

Development Corp, and remanding the cause for proof of

damages.

,

-

OPINIONS BELOW

The opinion of the Court of Appeals is reported at 287

F. 2d 852 and appears infra Appendix, p. 33, et seq.

The opinion is reported also at 1961 A.M.C. 793, but in-

accurately in its original version, which was iater corrected

- by order of the Court of March 27, 1961. The unreported

opinion of the United States District Court, its Findings

of Fact and Conclusions of Law, is printed infra Appendix,

p. 39, et seq., and at R. 874-887.

JURISDICTION

The judgment of the Court of Appeals for the Fifth

Circuit was entered on March 15, 1961, and copy thereot

is printed infra Appendix, p. 51. Thereafter petitioner

presented to the Court of Appeals petition for rehearing,

which was denied without further opinion on May 3, 1961.

Jurisdiction of this Court is invoked under the Act of

June 25, 1948, c. 646, 62 Stat. 928, 28°U.S.C., Sec. 1254

(1).

THE QUESTIONS PRESENTED FOR REVIEW

This petition presents the following questions:

I.

Whether the “pilotage clause” generally agreed upon be-

tween ships and their towing tugs in American harbor

movements is lawful, particularly under these circum-

stances:

An ocean-going vessel with her master in command

upon her bridge and with a full crew at their stations but

without motive power, was being shifted by tugs within

the confines of Galveston harbor. A licensed pilot, but an

3

employee of the company which was the charterer and

operator of the tugs, was on the bridge as “dead-ship”

pilot. On the advice of this pilot, the master ordered the

ship’s crew to drop the vessel’s anchor, clearly an act ot

pilotage or vessel management and not of towage. The

anchor struck a submerged pipe line. The tugs were in

no way involved and were absolved from any liability.

The contract between the vessel’s operator and the tug

owner contained no words attempting to relieve the tugs

or those connected with them for responsibility for negli-

gent fowage, but it did provide that any pilot upon a

towed vessel was the servant of the vessel, and that neither

the tugs nor their owners or agents or charterers would be

liable for any acts of the pilot.

Did your Honors hold in Bisso v. Inland Waterways

Corporation, 1955, 349 U. S. 85, that such a pilotage

clause was invalid, as the Courts below have held, or is such

a pilotage clause valid particularly where the negligence

claimed is an act of pilotage, as your Honors have held in

Sun Oil Company v. Dalzell Towing Co., 287 U. S. 291,

and in United States v. Chris Nielson, 349 U. S. 129, de-

cided on the same day as Bisso, and as has also since been

held in States Marine Corporation of Delaware v. Victory

Carriers, Inc., 9 Cir., 1959, 272 F. 2d 463, and Pennsylvania

Railroad v. The Beatrice, 2 Cir., 1960, 275 F. 2d 209, and

in all other decisions where a pilotage clause similar to the

one in the contract here was at issue?

II.

The operators of an ocean-going vessel desire to shift

her from one harbor berth to another. Although her full

crew is aboard, the vessel has no motive power, her engines

undergoing routine repairs. The operators have a contract

4

for tugs with one towing company, but another company

actually operates the tugs which on request are sent to

shift the vessel. By the contract the first towing company

also offers to provide a pilot for such a shift, but it has no

pilot in its employ and the tug operating company sends

to act as pilot a regular salaried employee, its port captain,

who is licensed by the United States Government to pilot

vessels in these waters, The pilotage fee charged the vessel

is paid to the contracting towing company, which pays

part thereof to the tug operating company, which in turn

pays part to the pilot.

With the pilot on the bridge during the shift are the

vessel’s master and third officer, and when told by the pilot

it was time to do so, the master has the crew drop anchor.

A pipe line is damaged by the anchor. The towing tugs

are held in no way to‘ blame. The contracting towing com-

pany, as owner of one of these tugs, is held not liable.

Is the tugboat operating company whose regular em-

ployee he is responsible as his employer for any negligence

of the pilot in the dropping of the anchor, as the Court

below holds; or is the pilot an independent contractor for

whuse acts such company is not responsible while he acts

as pilot, in accordance with the holding of Guy v. Donald,

203 U.S. 399, and the holding of the Court below in Damp-

shibsselskabet Atalanta A/S v. United States, § Cir., 31 F. 2d

961, 1929 A.M.C. 855, and a borrowed servant of the ship

or contracting towing company, in accordance with the rule

of Sun Oil Compapny v. Dalzell Towing Co., 287 U.S. 291,

and Standard Oil Co. v. Anderson, 212 U.S. 215?

STATEMENT

This is a suit for damages to one of the two submerged

pipe lines caused by its being struck by an anchor dropped

5

from a vessel being turned to enter a slip of the Port of

Galveston, Texas. The slip was known as Slip “A.”

The suit was in admiralty, and jurisdiction in the Dis-

trict Court for the Southern District of Texas lay under

the Act of June 25, 1948, c. 646, 62 Stat. 931, Title 28,

U. S. Code, Sec. 1333(1), amended Act of May 24, 1949,

c. 139, Sec. 79, 63 Stat. 101, and Act of June 19, 1948,

c. 526, 62 Stat. 496, Title 46, U. S. Code, Sec. 740.

Suit for damages in excess of $280,000 was brought by

libellants as those at interest upon the pipe line against the

M/V HAR CANAAN, from which the anchor was

dropped, and her operator, and against the assisting tugs and

their owning and operating companies, and by later amend-

ment against the pilot of the M/V HAR CANAAN,

petitioner Emmett Gray. Cross-pleadings were filed.

The evidence was largely without dispute, and with the

exception of the facts surrounding the issuance of the

order to drop the anchor, is with reasonable accuracy

though it is respectfully submitted too briefly summarized

by the District Court in its Findings of Fact, printed below

at Appendix, p. 40.

“Briefly, these are the controlling facts:

Pursuant to a permit issued by the United States Corps

of Engineers, on January 27 and 28, 1958, libellants laid

two pipe lines in a dredged trench on the bottom of Gal-

veston harbor. On the Galveston Island end, the lines

came out of the water about eighteen feet from the eastern

side of Slip “A.” From this point at the entrance to Slip

“A” the pipe lines ran almost at a right angle to the center

line of the channel directly across Galveston harbor to a

point opposite Slip “A” on Pelican Island.

The last of three Notices to Mariners relative to the

pipe lines was issued on January 16, 1958, and it notified

6

navigation interests of the location of the pipe lines, stat-

ing that the lines would run between Pier 41 (which is

immediately adjacent to and to the east of Slip ““A”) and

Pelican Island, and that “the location of the pipe lines is

marked by warning signs on Pier 41 and on Pelican

Island.”

Instead of the location being so marked, the sign on Pier

41 was in fact placed at its nearest point to them some

thirty-one feet east of the end of the pipe lines, and the

sign on the Pelican Island side across the harbor was

placed on a platform in the water east some one hundred

fifteen feet from the pipe lines.

The two pipe lines were laid on January 27 and 28,

and at no time between the time of their laying and the

time of the casuzlty on March 21 were the pipe lines ever

found to be farther apart than ten feet and actually were

crossed and had to be pulled apart on March 3, R. 596,

$99, and were pulled farther apart also on March 16 near

their Galveston Island end when found there to be only

one and one-half feet apart. R. 601-603.

The anchor struck the westernmost of the two pipe lines.

Since there was no evidence that the other line was touched

by the anchor, and since this line as stated lay no more

and probably less than ten feet from the one struck by the

anchor, it is manifest that had the pipe lines lain between

the warning signs neither would met have been struck.

On the morning of March 21, the M/V HAR CANAAN

was performing routine maintenance work upon her en-

gines and had no motive or rudder power, but in order that

her loading could continue it was desired to shift her from

the berth where she then lay about two miles through Gal-

veston harbor waters to another berth in Slip “A.” Her

agent notified the tug company, that the vessel was to be

shifted “dead-ship,” by the course of dealing it being un-

7

derstood that she had no motive power and that tugs and

a pilot were to be sent to her. Respondent Emmett Gray

was sent to act as pilot along with three tugs for power.

‘When he went aboard the vessel Captain Gray explained

to the master that it would be necessary to drop the ship’s

anchor to assist in turning the vessel when Slip “A” was

reached, and the master approved this planned maneuver,

giving orders to his crew to have the anchor ready.

The vessel was then moved by the tugs through the

harbor to Slip “A.” During the entire time of this shifting,

the tugs were directed by the pilot Captain Gray, but the

master was in command and hed with him on the bridge

was the third officer, her full crew was aboard the vessel,

and the vessel’s chief officer with the required number of

seamen were manning their deck stations.

When the vessel was near Slip “A,” the pilot told the

master the anchor should be dropped. The master testified

that he then checked the prominent signs warning of the

pipe line crossing and only after making sure the anchor

would drop well clear of any lines did he permit the ship’s

third officer to transmit the order to the chief officer and

crew forward, who dropped the anchor. R. 681-683.

Captain Gray testified that he knew generally that pipe

lines were being laid across the harbor between Pier 41

and Pelican Island but had not actually sighted them nor

while they were being worked on had before this time

piloted a ship in their vicinity nor had read the Notices

to Mariners dealing with them. In giving the order or

advice to the master to drop the anchor he relied on the

warning signs as to the location of the lines. (Captain

Gray’s recollection was that the master gave the order to

drop the anchor before Gray pointed out the signs to him;

the master testified positively, however, that he asked

Gray about the signs and himself checked them to be sure

the anchor would fall clear before giving the order to his

crew to drop the anchor. R. 681-683.)

There was no evidence that the three tugs furnishing the

motive power for the movement of the vessel were in any

way at fault.

For sometime prior to the day of the casualty, those tugs

which assisted in the movement of ocean-going vessels with-

in the harbors of Galveston and some other Texas ports,

i.e., which were used in the harbor towing of deep-sea vessels

such as the M/V HAR CANAAN, were owned by three

separate towing companies. One of these was Bay-Houston

Towing Company, whom the operator of the M/V HAR

CANAAN by signed contract engaged to provide all the

tugboat power it required.

These three owning companies made all agreements with

ship operators requesting the services of towboats, but did

not actually operate the tugs. The tugs were chartered bare-

boat 19 an operating company, petitioner G. & H. Towing

Company, that manned and operated them, so as regardless

of ownership to utilize the tugs most efficiently in assisting

vessels needing tugboat power.

Only at Galveston, where the state-licensed bar pilots

before the time of this casualty did not offer pilotage ser-

vices for such ships, did the three towing companies offer

to furnish pilotage for ships without motive power. But

these owning companies did not themselves employ any pilot

to perform such services; they requested petitioner G. & H.

Towing Company to furnish a pilot to perform their con-

tracts.

To act as such pilot for a ship without motive power,

G. & H. Towing Company designated its port captain,

respondent Emmett Gray. Captain Gray was licensed by the

United States Government to act as pilot for the waters of

Galveston harbor, but he held no license as a bar pilot from

*

ee

Oe Re ay et eg Sa

9

' the State of Texas and was not a member of the Galveston

Pilots Association.

While, as stated, the operation of the tugs was done

only by G. & H. Towing Company, their charterer, the

three owning companies maintained separate soliciting

cflices and were actively competitive with each other, for

they and not G. & H. Towing Company made the contracts

with steamship operators for tug services and billed for the

services, and only the company having such contract re-

ceived thirty-five per cent of the amounts paid. Even if

it owned the tug which performed the service unless it

had the contract with the steamship operator the owning

company received none of the revenue derived from that

particular towing job. In each instance the charterer,

petitioner G. & H. Towing Company, received sixty-five

per cent of the revenues earned, being paid by the con-

tracting owning company and not by the steamship oper-

ator. R. 784-785.

Where in Galveston harbor pilotage services were fur-

nished a ship without motive power, the contracting tow-

ing company kept thirty-five per cent of the charge made

the ship, paid G. & H. Towing Company sixty-five per

cent, and out of its sixty-five per cent G. & H. Towing

Company paid Captain Gray $20.00. R. 787.

There is not an iota of evidence that to secure tug

services in Galveston or elsewhere steamship operators were

in any way required to sign any agreement with any of the

towing companies as a condition of receiving the services

of tugs, but if a steamship operator did sign an agreement

by whch it agreed to obtain all of the tug services it needed

only from the one owning company with which it con-

tracted, it obtained the tug services at a ten per cent

discount off the tariff rates. Appendix IV, p. 52.

10

The charterer of the M/V HAR CANAAN, Maritime

Overseas Corporation, had before the casualty signed such

an exclusive contract with Bay-Houston Towing Com-

pany, and it received the ten per cent discount for the

tug hire and the pilotage furnished the vessel on the day

in question, paying the sums due to Bay-Houston Towing

Company. R. 727-729.

There were no material differences between the contracts

offered steamship operators. Each contained a provision

allowing the use of tugs other than those owned by the

contracting towing company like this:

“Should Bay-Houston Towing Co. tugs be not con-

veniently available for the required services, the said

Bay-Houston Towing Co. shall have the right to

designate or engage the tugs, and such other tugs and

their owners or operators shall be covered by this con-

tract as though they were Bay-Houston Towing Co.

tugs.

And each contained a “pilotage clause,” as follows:

“Whenever any pilot goes on board a vessel to assist

her movement or handling, he becomes and continues

to be solely the servant, agent and employee of said

vessel, and her owners and/or charterers in respect of

all acts done by him, or all omissions, and all orders

given by him to any tugs engage or to said vessel or

otherwise, in the movement or handling of said vessel,

or in connection with any decisions made by said pilot

as to the manner or method of handling said vessel,

and néne of the tugs or their owners, agents, Masters,

servants, employees or charterers shall be responsible

or liable for any act or omission of said pilot, or for

any claims or damages caused by or resulting for any

act, omission or order of said pilot.”

11

Each contract also contained as part of the tariff for

Galveston-Texas City the provision:

“Pilotage-Shifting Vessels Without Own Power. . .

$60.00.”

Nowhere in the tariffs, nor in the contract signed by

Maritime Overseas Corporation with Bay-Houston Towing

Company covering the movement of the M/V HAR

CANAAN on the day of the casualty, is there any language

which could conceivably be read to mean that the towing

companies contracted to move vessels from one location

to another. The company offered and agreed only to pro-

vide tugboat power, and the rates charged were only for

each tug furnished, though these rates of course varied

with the distance the tug assisted the vessel. Appendix V,

p. 55.

The Trial Court found that Captain Gray was negli-

gent in giving the order to drop the anchor, which fell

on the pipe line, the “presence” of which he should have

known from other sources and from the prominent warn-

ing signs but as to the location of which he was not mis-

led by the position of the warning signs. The master of

the M/V HAR CANAAN was found not at fault because

“the pilot’s lack of knowledge was not manifest so as to

warrant intervention by the Master.” Gray was held liable

personally for his negligence and found not to be a loaned

servant to the vessel, and G. & H. Towing Conspany liable

because he was its employe acting in the scope of his em-

ployment, and the M/V HAR CANAAN liable in rem

for the negligence of Gray “as her pilot.”” The vessel was

allowed indemnity from both Gray and petitioner G. & H.

Towing Company.

—_ eee he” a

12

The towing tugs and their owners were found not liable.

The exculpatory provisions of the pilotage clause of the

eontract with the vessel’s operator were held to be void,

«ance being placed upon Bisso v. Inland Waterways

Corporation, 349 U. S. 85, on the ground that the mono-

polistic situation in Galveston harbor gave no freedom of

choice to vessels in the type of towing contract offered

and to secure tugs vessels had to agree to such exculpatory

provisions. Sun Oil Company v. Dalzell Towing Co., Inc.,

287 U. S. 291, was distinguished.

The Court of Appeals affirmed, petitioner Gray’s neg-

ligence being found to be a failure to use due care “to

find out just where the pipe lines were, in that, without

soundings or otherwise taking adequate precautions to

precisely locate the pipe lines he dropped the anchor

on them.” No mention is made of the master of the

M/V HAR CANAAN.

After thus imposing upon petitioner Gray an absolute

duty to know the exact location of the pipe lines, and

holding petitioner responsible as his employer, the Court

below agreed the pilotage clause was invalid under

the Bisso decision and distinguished the case of Sun Oil

Company v. Dalzell Towing Company as one dealing

“with pilotage in its real sense of service rendered by

publicly licensed involuntary or compulsory pilots” and

stated Gray was not such a pilot, the case really

being merely one where G. & H. Towing Company

furnished a towing service to a dead ship and its port

captain conducted it. The liabilities of the M/V HAR

CANAAN and of Maritime Overseas Corporation were

then affirmed under the law governing pilotage. (The

Court of Appeals by its order of March 27, 1961, cor-

rected its statement that Maritime Overseas Corporation

had been found liable in personam.)

Oceana “gue Eee Lt

13

REASONS FOR GRANTING THE WRIT

Your Honors should grant writ of certiorari in this

cause for the following reasons:

(1) To correct the manifest error of the Court of

Appeals in refusing to follow the settled law that an

exculpatory pilotage clause such as that in the contract

here is valid and not contrary to public policy and un-

enforceable, there being not a single other American

decision so holding, and your Honors having expressly

upheld as valid such a clause in Sun Oil Company v.

Dalzell Towing Co., 287 U.S.291, and having as recently

as 1955 affirmed the validity of such a clause in United

States v. Chris Nielson, 349 U.S 129, decided the same

day as Bisso v. Inland Waterways Corporation, 349 U.S.

85. We respectfully submit that the Court is in plain

error in holding applicable to this case of pilotage the

decision in Bisso v. Inland Waterways Corporation, which

only held invalid a broad towage freedom-from-liability

clause, and in declaring the Sun Oil Company v. Dalzell

Towing Co., case inapplicable as one of “publicly licensed

involuntary or compulsory pilots,” that Dalzell case being

clearly one where no compulsory pilot was at all in-

volved and being instead one where the captain of one

of the assisting tugs directed the ship maneuver. We

further earnestly submit the decision below is in direct

conflict with the recent decisions in Sfates Marine Corpo-

ration of Delaware v. Victory Carriers, Inc., 9 Cir., 1959,

272 F. 2d 463, and Pennsylvania Railroad v. The Beatrice,

2 Cir., 1960, 275 F. 2d 209, and with all other decisions

where the pilotage clause has been directly at issue. Since

a similar pilotage exculpatory clause is, as far as peti-

tioner can tell from the decisions, at use in every American

port, this decision if left unreversed would tend to upset

"Th tie STb AS RE i SENAY

6, Cisune ane 7S ee ee

14

an important segment of American maritime law and

contracts under which most ocean-going vessels are

‘moved in American harbors.

‘2) To correct the error of the Court in holding that

where an employee of a towing company is aboard a fully

manned vesscl under the command of her master acting

a3 the vessel’s pilot and held by the Court to a standard

of care even greater than that lawfully required of pilots,

and voluntarily engaged by the vessel’s operator, his reguiar

employer is responsible forkis negligent pilotage acts, the

holding of the Court of Appeals being directly contrary

to the maritime law that pilots are independent contractors

‘subject only to the control of the vessel’s master, as held

in many cases, including Guy v. Donald, 203 U.S. 399,

Sherlock v. Alling, 93 U.S. 99, and two cases decided by

the Court below, namely Charente Steamship Co. v. United

States, 5 Cir., 12 F. 2d 412, atid Dampskibsselskabet

Atalanta v. United States, 5 Cir., 31 F. 2d 961.

(3) To correct the error of the Court below in holding

that a pilot, normally employed in another capacity, fur-

nished to a contractor so that it can perform its contract

to provide a pilot for a fully manned vessel in command

of its master though without motive power, remains in the

employment of his regular employer during all the time he

is aboard the vessel acting as pilot and does not become

the servant of the vessel or the contractor, so that his

general employer is liable for his negligent pilotage acts,

the holding of the Court below being directly contrary to

the decisions of Sun Oil Company v. Dalzell Towing Co.,

287 U.S. 291, and Standard Oil Co. v. Anderson, 212 US.

215.

15

ARGUMENT

I.

With all respect, petitioner respectfully submits that the

Court below has confused the decisions which hold invalid

clauses exempting companies and tugs from liability for

negligent towage with the decisions which uphold the

validity of exemptions from liability for acts of pilotage.

We submit that this is abundantly clear from a careful

reading of Bisso v. Inland Waterways Corporation, 349

U.S. 85, striking down towage exemptions and carefully

affirming the correctness of decision of Sun Oil Company

v, Dalzell Towing Co., 287 U.S. 291, where the exemption

is a pilofage exemption as here, and a careful reading of

United States v. Chris Neilson, 349 U.S. 129, which also

affirms the validity of pilotage exemptions and states Bisso

voids only fowage exemptions,

The consequences of this mis-reading of those decisions

are that petitioner, while not even a party to the contract

under the terms of which the tugs and the pilot were

furnished the vessel, and engaged only in the business of

operating tugboats, is denied the protection of the pilotage

exemption expressly set forth in the contract and to which

the Court of Appeals acknowledges it would otherwise be

entitled since the Court helds “in effect that neither Gray

nor the Towing Company, his employer, would be liable

for the negligence of Gray, its employee, indeed its port

captain.” Petitioner is therefore held liable for damages

stated to be in excess of $280,000.00, and instead of being

allowed indemnity from the vessel operator as it would be

had the case been correctly decided in accordance with

numerous decisions, particularly those decided by the Court

RBA SRRR A of. EY

16

of Appeals for the Second Circuit, is instead required to

indemnify the vessel!

Petitioner respectfully submits that this decision is con-

trary to the settled American maritime law governing

in circumstances such as these.

The Contract Afforded Petitioner Exemption for Pilotage

Faults, Though Not for Towage Faults

The contract between Bay-Hovuston Towing Company

and Maritime Overseas Corporation, operator of the M/V

HAR CANAAN, is reproduced at Appendix V, p. 55,

below.

It will be noted that petitioner G. & H. Towing Com-

pany is not a party to this contract and not named therein,

though the pilotage clause clearly exempts petitioner G.

& H. Towing Company because it exculpates the charterers

of the tugs furnished the vessel and the contract.

Nowhere in the contract is any language exempting the

tugs or those at interest upon them for any faults of towage

or tug operation.

On the oth: hand, the contract in several places -ex-

pressly says that the company only agrees to furnish ‘ug

power, and expressly provides against liability for the

acts of “any pilot” on board an assisted vessel. This

clause reads:

“Whenever any pilot goes on board a vessel iv assist

her movement or handling, he becomes and continues

to be solely the servant, agent and employee of said

vessel, and her owners and/or charterers in respect of

all acts done by him, or all omissions, and all orders

given by him to any tugs engage or to said vessel or

otherwise, in the movement or handling of said vessel,

17

or in connection with any decisions made by said pilot

as to the manner or method of handling said vessel,

and none of the tugs or their owners, agents, Masters,

servants, employees or charterers shall be responsible

or liable for any act or omission of said pilot, or for

any claims or damages caused by or resulting for any

act, omission or order of said pilot.”

It will have been noted that the Court of Appeals has

by implication held that had this clause been valid, it would

have protected petitioner G. & H. Towing Company.

There can be no doubt that petitioner comes within the

language of the clause even though not a party to the

contract. The contract was between Bay-Houston Towing

Company, a tugboat owner and a respondent herein, and

Maritime Overseas Corporation, the charterer and claimant

and operator of the M/V HAR CANAAN, a respondent

herein. The contract expressly permitted the towing com-

pany to furnish tugs other than its own, and it called upon

petitioner G. & H. Towing Company, charterer of the

tugs furnished the M/V HAR CANAAN to tow it, to

supply the tugs.

By the contract Bay-Houston Towing Company also

agreed in Galveston harbor to furnish a pilot for 2 ship

which was to be shifted without its own motive power.

There is nothing in the contract which required Bay-Hous-

ton Towing Company to furnish any particular pilot, and

it secured the pilot for the vessel from petitioner, the

tugs’ charterer. The pilotage clause is not restrictive, and

it expressly exempts the tug charterer, petitioner, from any

liability for the acts of any pilot. It is therefore clearly

established here that by the express terms of the pilotage

clause of the contract petitioner is exempted from liability

18

for the acts of the pilot Gray while aboard the vessel per-

forming pilotage duties.

Dropping the Anchor Was

an Act of Pilotage

It is certainly clear that dropping the ship’s anchor can-

not rightfully be deemed an act of towage. It was clearly

an act in the navigation and management of the vessel,

accomplished by the ship’s crew on the command of the

ship’s master and at the suggestion, advice, or order of the

ship’s pilot on the bridge.

The towing tugs obviously had nothing to do with the

dropping of the anchor, as is clearly demonstrated by the

fact that the District Court dismissed the libel as to them

and their owners and absolved them from liability.

Decided cases likewise hold that the dropping of a ship’s

anchor is an act in the management of a vessel. Please see

The Etona, §.D. N.Y., 64 F. 880, affirmed 2 Cir., 71 F.

895, and Luria Bros. & Co., Inc, v. Eastern Transp. Co., 2

Cir., 1937, 89 F. 2d 900, both Harter Act cases.

And finally, petitioner Gray has been held by both

Courts below to the high standard of care required of

pilots, he was sent aboard the vessel as pilot and acted under

his government license of pilot, and the District Court

held him as pilot and held the vessel in rem “for the negli-

gence of Captain Gray as pilot.” The contract of course

called him a pilot.

Pilotage Exemption Clauses Are Valid

Petitioner believes that there have been no previously

decided cases in which the applicability of a like pilotage

clause has been directly at issue that have held such a clause

19

invalid. The decided cases have so uniformly upheld the

validity of such clauses that Mr. Justice Frankfurter in

his dissenting opinion in Bisso v. Inland Waterways Cor-

poration, 349 U.S. 85, at 98, e¢ sey., was able to assert on

a review of the authorities that all exemption clauses in

towing contracts had theretofore been found to be valid.

The decision in Bisso 1. Inland Waterways Corporation,

at page 92, clearly holds pilotage exculpatory clauses valid,

citing Sun Oil Company v. Dalzell Towing Co., in the fol-

lowing language:

“It is contended that the towage contract rule we

have accepted was rejected by this Court in Sun Oil

Co. v. Dalzell Towing Co., 287 U.S. 291, 53 S. Ct.

135, 77 L. Ed. 311. We disagree. Unlike the Steamer

Syracuse, The Wash Gray and the instant case, Sun

Oil did not involve a contract designed to relieve a

towboat owner from liability for negligent towage.

The contractual clause there involved related only to

pilotage. The clause provided that a tug captain who

piloted a vessel propelled on its own power should be

considered the servant of that vessel and that the tug

owners should not be liable for his negligent pilotage.

Sun Oil construed this contract as relieving the tug-

boat owners from all liability for negligence of the

tug captain while piloting Sun Oil’s vessel and held

the contract valid as thus construed. But both the

Court of Appeals and this Court recognized that hold-

ing the pilotage contract valid did not conflict with

The Steamer Syracuse or The Wash Gray. Indeed, this

Court express!y stated that the Sun Oil decree was

‘not in conflict with the decisions’ in The Steamer

Syracuse and The Wash Gray. It is of course possible

that the Court found an absence of conflict in the

casessbecause of a different construction given the dif-

20

ferent contracts involved. We doubt this, but how-

over this may be there are more basic differences upon

which we prefer to rest this Court’s statement that Sun

Oil did not conflict with the two prior cases.

“There are distinctions between a pilotage and a

towage exemption clause which make it entirely rea-

sonable to hold one valid and the other invalid. A

pilotage clause exempts for the negligence of pilots

only; a towage clause exempts from all negligence of

all towage employees, Pilots hold a unique position in

the maritime world and have been regulated exten-

sively both by the States and Federal Government.

Some state laws make them public officers, chiefly re-

sponsible to the State, not to any private employer.

Under law and custom they have an independence

wholly incompatible with the general obligations of

obedience normally owed by an employee to his em-

ployer. Their fees are fixed. by law and their charges

‘must not be discriminatory. As a rule no employer,

no person can tell them how to perform their pilotage

duties. When the law does not prescribe their duties,

pilots are usually free to act on their own best judg-

ment while engaged in piloting a vessel. Because of

these differences between pilots and towage employees

generally, contracts stipulating against a pilot’s negli-

gence cannot be likened to contracts stipulating

against towers’ negligence. It is one thing to permit

a company to exempt itself from liability for the

negligence of a licensed pilot navigating another com-

pany’s vessel on that vessel’s own power. That was the

Sun Oil case. It is quite a different thing, however

to permit a towing company to exempt itself by con-

tract from all liability for its own employees’ negli-

gent towage of a vessel. Thus, holding the pilotage

contract valid in the Sun Oil case in no way conflicts

with the rule against permitting towers by contract

21

wholly to escape liability tor their own negligent tow-

a ing.”

Petitioner respectfully submits that your Honors af-

firmed this validity on the same day in the following por-

tion of your decision in Unit:d States v. Chris Neilson,

349 U.S. 129, 130:

*. . ; We granted certiorari to consider the meaning

and validity of the pilotage clause, 348 U.S. 811, 75

S. Ct, 59, and at the same time granted certiorari in

two other cases, today decided. which involve validity

of contracts exempting towers from liability for negli-

gent towage. Bisso v. Inland Waterways Corp., 349

U.S. 85, 75 §. Ct. 629; Boston Metals Co, v. The

Winding Gulf, 349 U.S. 122, 75 S. Ct. 649.

“4¢Sun Oil Co. v. Dalzell Towing Co., 287 U.S. 291,

§3 §. Ct. 135, 77 L. Ed. 311, involved the meaning

and validity of a pilotage contract substantially the

same as the one here. One of Dalzell’s tug captains

negligently piloted Sun Oil’s vessel causing the boat

to ground and suffer damages. Sun Oil sued Dalzell.

The contract exempting Dalzell from liability for

pilotage was pleaded as a defense. This Court held

that the tug company could validly contract against

being ‘liable for any damage’ caused by the negli-

gence of one of its captains in piloting Sun Oil’s ves-

sel and construed the contract there as having that

ad

That petitioner’s reading of these decisions is correct is

further established, it is respectfully submitted, by the

decisions in States Marine Corporation of Delaware v. Vic-

tory Carriers, Inc., 9 Cir., 1959, 272 F. 2d 463, and Penn-

sylvania Railroad v. The Beatrice, 2 Cir., 1960, 275 F. 2d

209.

22

Petitioner therefore respectfully submits that the Court

below is clearly in error in its interpretation of Bisso v.

Inland Waterways Corporation, Sun Oil Company v. Dal-

zell Towing Co., and United States v. Chris Neilson, and

that its decision is clearly in conflict with the two last

cited cases decided by the Courts of Appeal for the Ninth

and Second Circuits.

No Circumstances Here Justify Denying

Validity to the Pilotage Clause

The trial Court found that public policy required the

pilotage clause to be denied validity because under the

monopolistic situation prevailing in the port of Galveston

a vessel had no freedom of choice in the type of towing

contract offered and must accept a contract with the ex-

culpatory provisions to secure tug assistance.

While it is not admitted that where as here three separate

owning companies charter their tugs to an operating com-

pany to secure efficient service there is any monopolistic

situation, nevertheless the Court is in plain error .in stating

that a vessel had to agree to a contract with the exculpa-

tory clause to secure tug assistance.

There is absolutely no evidence that vessels were under

any requirement to sign the contract, as the operator of

the M/V HAR CANAAN did here, in order to obtain tug

assistance, As an examination of the contract shows, the

inducement to sign it and agree to the contract is the ten

per cent discount afforded those signing the contract. This

was so testified to. R. 803. And please see Appendix IV,

p. 52, and particularly the closing sentence of the of-

fer, “All charges are net, except when services are per-

formed under contract, then a discount of 10; is to ap-

ply on all tariff rates.”

23

This clearly shows ships could secure tugs without having

to sign the contract, and there is as stated no evidence to

the contrary.

Further, none of the cases, which uniformly uphold the

validity of pilotage clause exemptions, and which are from

the great breadth of decisions found in harbor towing

contracts in similar terms ir practically all American ports,

have ever intimated that because towing services are not

furnished by numerous companies the pilotage exemption

is invalid. And in the exemption clause employed in the

greatest American port, New York, the exemption is ac-

corded from acts of the captains off the tugs, a much

broader exemption chan the one here of a licensed pilot,

even though an employee of the towing company actually

furnishing the tugs.

Nor does reason support this view why such a clause

should be held invalid. Pilots are licensed by governmental

authority and exercise independent judgment and are not

subject to supervision and control, except on occasion by

the master of the vessel. And why should an assisting tug

be obligated to assume the ship’s responsibility for the acts

of the pilot? The ship is a common carrier, the towing tug

not. If the towing tug diligently performs its towing du-

ties, why should it be burdened with an added responsibility

for the pilot?

The Court of Appeals did not base its decision holding

the clause invalid upon the ground stated by the District

Court, but instead preferred to affirm on the ground that

petitioner was in fact not a pilot but simply one in charge

of a dead-ship towing operation.

(Of course, its characterization of the Dalzell case as

one of true pilotage by publicly licensed compulsory or in-

24

voluntary pilots is manifest error; in that case the piloting

was done by a captain from one of the assisting tugs, and

the exculpatory clause was one stating a captain off a tug

became an employee of the vessel being assisted.)

Since the exculpatory clause generally used in New York,

and held valid in Sun Oil Company v. Dalzell Towing Co.,

deals with a tug captain and not a pilot, as do many such

clauses held valid, the reason given by the Court of Ap-

peals is without support in the adjudicated cases.

Its description of the facts here is in error also, it is sub-

mitted with all respect: the contract, which cannot right-

fully be ignored as the Court apparently does, nowhere

provides that a complete towing service was to be pro-

vided the ship. The contract provided only for tug power,

which was furnished, and entirely independently had a

clause agreeing in Galveston harbor to provide a pilot on

request where the vessel was to be shifted without motive

power. :

And of course, finally, the acts of negligence charged in

this vase were acts of pilotage, not towage, and the Bisso

case reference is in error also.

Petitioner respectfully submits, therefore, that the Court

of Appeals is in clear error in denying the validity of the

pilotage clause under the circumstances of this case, and

that he is by such clause in accordance with the settled

law enforced in Moran Towing & Transp. Co. v. Nav. Lib.

Triestina, 2 Cir., 1937, 92 F. 2d 37, 1937 A.M.C. 981,

cert. den. 302 U.S. 744, and Pennsylvania Railroad v. The

Beatrice, 2 Cir., 1960, 275 F. 2d 209. and States Marine

Corporation of Delaware v. Victory Carriers, Inc., 9 Cir.,

1959, 272 F. 2d 463, entitled to be indemnified by the

M/V HAR CANAAN and its operator Maritime Overseas

25

Corporation from any liability to respondents the pipe line

owners.

II.

The M/V HAR CANAAN here, though without mo-

tive power, was fully manned, and throughout the maneu-

vering of the vessel her master and third officer were upon

the bridge along with the pilot and her deck crew were

at their proper stations.

Captain Gray undoubtedly was the vessel’s pilot, though

a pilot voluntarily engaged by the vessel’s operator. The

Trial Court in conformity with the evidence found him

to be a pilot, held him liable for what are clearly acts of

pilotage and not towage in accordance with standards of

care imposed on pilots, and held the vessel liable in rem

for his acts “as pilot.” Of course such fact findings are

under the rule of McAllister v. United States, 348 U.S. 19,

binding upon the Court of Appeals, but nevertheless that

Court has at least inferentially accepted the finding that

Captain Gray was a pilot by holding him to a standard of

care even greater than that imposed upon pilots.

The contract between Bay-Houston Towing Company

and respondent Maritime Overseas Corporation denomi-

nated him a pilot, and the master of the vessel considered

Captain Gray to be the vessel’s pilot.

Under such circumstances there can be no doubt of the

error of the Court of Appeals in holding petitioner G. &

H. Towing Company liable for Captain Gray’s acts simply

because it was his normal or general employer.

It has long been settled maritime law that a pilot aboard

a navigated and manned vessel is an independent contractor,

eh a ae eat

SS

26

himself responsible for his acts, Guy v. Donald, 203 U.S.

399, even though the vessel and its operators are as his

employer also responsible. Sherlock v. Alling, 93 U.S. 99,

and please see the statements to that effect also in Homer

Ramsdell Transportation Co. v. La Compagnie Generale

Transatlantique, 182 U.S. 406. The Court of Appeals below

has itself expressed the rule clearly in Dampskibsselskabet

Atalanta v. United States, 5 Cir, 31 F. 2d 961, 962, in the

following language:

“The fundamental principle underlying the exemp-

tion of pilots’ associations from liability for negligence

in performing their duties as pilots is that the associa-

tion exercises no control over the manner in which

those duties are to be performed, and therefore a pilot

cannot be said to be an agent of the association in that

respect.”

While the pilot is an independent contractor he never-

theless is subject to the master’s control and does not relieve

the master of his command of the vessel. This is of course

settled maritime law, as held in The China, 7 Wall. 53,

The Oregon, 158 U.S. 186, and many other cases, including

the decision of the Court below in Charente Steamship Co.

v. United States, § Cir., 12 F. 2d 412, at p. 413.

Can there be any doubt that if in the course of the move-

ment on this occasion the pilot had given orders imperiling

the vessel itself or other vessels using the harbor it would

have been the duty of the master upon the bridge with

Captain Gray to have countermanded the order or relieve

him from acting as pilot?

And how could any control over Captain Gray have been

exercised by petitioner G. & H. Towing Company?

Do eS AIA TLIC IRE TH UCR IS ary Oe enn | 4

. *.

27

Peitioner respectfully submits that holding it as the gen-

eral employer of the pilot for his acts while serving aboard

the vessel as pilot is clearly wrong and directly contrary

to the settled law and such holding should be reversed.

iil.

Peiuioner G. & H. Towing Company respectfully submits

further the Court below was clearly in error likewise in

holding it as the employer, just as the trial Court was in

clear error in so holding petitioner and in finding that

while acting aboard the vesse! as its pilot Captain Gray

was not a borrowed or loaned servant.

It is of course true that while Captain Gray was in the

regular employment of G. & H. Towing Company neither

he nor G. & H. Towing Company were parties to the

contract between Bay-Houston Towing Company and

respondent Maritime Overseas Corporation, under which

the vessel requested his services and under the terms of

_ which he went aboard the vessel.

The contract of course did not obligate Bay-Houston

Towing Company to obtain a pilot from petitioner: it

could have furnished any person qualified to act as pilot,

its own employee or any other person. Without a doubt,

in securing the pilot from petitioner to fulfill its con-

tractual obligation, Bay-Houston Towing Company made

the person furnished to that extent its own agent or servant

so far as this could lawfully be done. Of course it is clear

Bay-Houston Towing Company was paid for the pilot’s

services in accordance with the contract at the contract

rate, and it retained a portion of the amounts paid.

How can it be found if the evidence is given its lawfu'

effect that Bay-Houston Towing Company was not there-

28

fore the special employer of the pilot and that while aboard

the vessel Captain Gray was certainly no longer the em-

ployee of G. & H. Towing Company?

It is of course noteworthy that Pay-Houston Towing

Company was dismissed from this cause and held not |.2ble,

along with its tug and the other tugs and their owners,

and while this was done because there was no proof at all

the towing services were negligently performed, it is sub-

mitted such dismissal effectively results in finding that

actually, as is of course the law, pilot Gray was the servant

of the vessel and its operators while aboard it as pilot.

Certainly the pilot Gray while aboard the vessel and

acting as pilot was the loaned employee of the vessel and

its operator Maritime Overseas Corporation, if regard is

paid to the settled law. This is certainly the holding of

your Honors in Sun Oil Company v. Dalzell Towing Co.,

287 U.S. 291, where it is said:

“Respondent’s responsibility is not to be extended

beyond the service that it undertook to perform. It

did not furnish pilotage. The provision that its tug

captains while upon the assisted ship would be the

servants of her owner is an application of the well-

established rule that when one puts his employee at _

the disposal and under the direction of another for the

performance of service for the latter, such employee

while so engaged acts directly ior and is to be deemed

the employee of the latter and not of the former.

Denton v. Yazoo & M.V.R. Co., 284 U.S. 405, 308,

§2 S. Cr. 141, 76 L. Ed. 310. It would be unconscion-

able for petitioner upon occurrence of a mishap to

repudiate the agreement upon which it obtained the

service.”

29

As has been pointed out above, certainly no one other

than the master of the vessel had any control over Captain

Gray while he was upon this manned vessel performing

his duty as pilot. Within the tests laid down by your

Honors in Standard Oil Co. v. Anderson, 212 U.S. 215, and

those in Fries v. United States, W.D. Ky., 76 F. Supp. 396,

affirmed 170 F. 2d 726, cert. den. 336 U.S. 954, and Dougall

v. Spokane, P. & S. Ry. Co., 9 Cir., 207 F. 2d 843, cert.

den. 347 U.S. 904, certainly Captain Gray was the em-

ployee of the vessel and nof of petitioner. As the rule is put

in the Dougall case, at page 846:

“The test is not for whose benefit the workman is

performing services but who had the right to control

him in the performance of his duties.”

Furthermore, the holding of the Court of Appeals that

this maneuver after all was simply a towing operation of

petitioner's under the direction of its employee Captain

Gray 1s clearly wrong.

This holding of course first of all ignores completely

the contract and the contractual relationships here. The

‘contract between Bay-Houston Towing Company and

Maritime Overseas Corporation did not call for anything

more than the furnishing of tugs and a pilot: it did not

in any way call for Bay-Houston Towing Company to

take charge of and to move the ship as an entire job.

Nor was of course petitioner a party to that contract,

as has been pointed out.

Conclusively to the contrary of the Court’s holding, it

is respectfully submitted, is the fact that the vessel was

fully manned, and the vessel and its movements were in

direct charge of the vessel’s master, who never either in

law or in fact relinquished his command to Captain Gray.

woe

30

CONCLUSION

For the reasons set forth above, it is respectfully prayed

that this petition for writ of certiorari be granted and that

the judgment of the Court of Appeals be reversed and the

___petitioner freed from liability and indemnified from any

liability by the vessel and its operator respondent Maritime

Overseas Corporation, and petitioner be held not required

to indemnify the claimant of the M/V HAR CANAAN.

Respectfully submitted,

ROYSTON, RAYZOR & COOK

Cotton Exchange Building

Galveston, Texas

ROBERT EIKEL

1910 Tennessee Building

Houston 2, Texas

By

Attorneys for Petitioner

ROBERT EIKEL,

Of Counsel

31

CERTIFICATE OF SERVICE

I hereby certify that service of the within petition for

writ of certiorari was made upon McLeod, Mills, Shirley

& Alexander, 801 Santa Fe Building. Galveston. Texas.

attorneys for respondents, and Eastham, Watsor, Dale &

Forney, 538 Mellie Esperson Building, Houston. Texas,

attorneys for respondent Maritime Overseas Corporation,

claimant of the M/V HAR CANAAN, by mailing copy

of the same to them at their addresses shown, this

day of July, A. D. 1961.

— Se ee

ROBERT EIKEL

NS PEEP Se A ot ea ee eee

33

APPENDIX I.

IN THE

Anited States Court of Appeals

FOR THE FIFTH CIRCUIT

No. 18619

EMMETT GRAY, G & H TOWING COMPANY and

MARITIME OVERSEAS CORPORATION,

Appellants,

Vv.

EDWIN E. JOHANSSON, KANSAS CITY BRIDGE

COMPANY, MERRITT-CHAPMAN & SCOTT COR-

PORATION, and PELICAN ISLAND DEVELOP-

MENT CORPORATION,

Appellees.

Appeal from the United States District Court for the

Southern District of Texas.

(March 15, 1961.)

Before TUTTLE, Chief Judge, HUTCHESON, Circuit

Judge, and CLAYTON, District Judge.

HUTCHESON, Circuit Judge: This appeal is from

findings and a judgment in admiralty in favor of the

libeliants, in a suit brought by them as owners of pipe

fines, for damages resulting from their negligent destruc-

tion in the course of shifting the M/V Har Canaan as a

dead ship to a slip in Galveston Harbor.

34

A great deal of testimony was taken on the issue of

fault, and the district judge made full findings in effect

that the destruction of the pipe lines was due to the

negligence of the respondent, Emmett Gray, port cap-

tain for G & H Towing Co., who was furnished by it

as a pilot for the dead ship movement.

Based on these findings, the court adjudged: (1) Gray

liable; (2) the Har Canaan liable in rem; (3) Maritime

Overseas, owner of the Har Canaan, not liable in per-

sonam; and (4) G & H Towing Co., the employer and

furnisher for the movement of Emmett Gray, its port cap-

tain liable in personam. He also denied and awarded in-

demnity as follows:

“Thus, as to the liability over between the

several respondents, the following conclusions are

made.

“6. G & H Towing Company and Captain

Emmett Gray are not entitled to indemnity from

Maritime Overseas Corporation, or from the Har

Canaan, for any payment they may be required to

.make under the decree to be entered herein.

“7. Maritime Overseas Corporation, as claim-

ant of the Har Canaan, is entitled to indemnity

from Captain Emmett Gray, individually, and

from G & H Towing Company for any liability

it will have to libellants under the decree to be

entered herein, The liability of Captain Gray

and G & H Towing Company to Maritime Over-

seas will be joint and several.”

Gray, as the respondent held primarily liable, here

insisting that the findings and conclusions, that he was

negligent in handling the ship so as to cause injury to the

pipe lines, are clearly erroneous, launches massive attacks

upon the findings, that he was negligent, and urges upon

35

us that the cause of the injury to the pipe lines was negli-

gence not on his part but on the part of the pipe line

owners in not properly laying and maintaining the lines

in place and in not clearly and properly marking their

location.

The other appellants icin him in this attack and argue

mightily that the district judge has misconceived what

actually occurred and that the findings of negligence are

against the truth and right of the case.

The G & H Towing Company, in addition to its attack

upon the negligence findings of the court, strongly attacks

the court’s conclusion, that the clause in its contract pro-

viding in effect that it would not be liable for the acts of

pilots furnished by it would not avail it, as an erroneous

‘conclusion of law, and urges that, because of that clause,

Gray’s negligence would not be imputed to it, and it could

not, therefore, be held liable for it.

The Har Canaan and Maritime Overseas Corporation,

its owner, argue vigorously that they were not responsible

and cannot be held liable for the negligence of the pilot.

Each of these argue that the conclusions on idemnity are

wrong.

For the reasons hereafter stated, we are of the opinion:

that the district judge was right throughout in his findings

of fact and in his conclusions of law, that Gray was guilty

of negligence in causing the anchor to be dropped upon the

pipe line, and that, as a result of his negligence, he and

the other respondents found liable are liable to the pipe

line owners for the damage done them; and that the right

of exoneration, action over, or indemnity is as he concluded

it to be.

Taking up first the primary question of whether the

findings of fact as to fault should be set aside, we think

36

it sufficient to briefly say that the matter of fault or

negligence is a disputed issue, and that, on the record as

a whole, there was ample evidence for the district judge

to find, as he did: that Gray and, therefore, the Har Canaan

and its owners, and the G & H Towing Company knew

that the pipe lines were laid in the slip under permit;

that the burden was heavily upon them to show, in defense

of their act in dropping the anchor, that they had made

proper inquiries as to just where they were laid; and that

due care had been used in dropping the anchor to avoid

striking and injuring them in the course of the ship’s

movement; that, in short, Gray and the other respondents

could not shift liability for the affirmative acts causing

injury to the pipe line as a result of dropping the anchor

on the lines by complaining here that, as matter of law,

the pipe line owners were at fault in not marking more

precisely the position of the lines, or that the findings that

they were not are clearly erroneous,

In declaring these views, we are not holding chat the

district judge could not have found the fault and re-

sponsibility as these contend he should have. We are hold-

ing, though, that it was entirely proper for the. district

judge to find, as he did, upon the whole facts, that the

proximate cause of the injury sued for was the failure

of Gray to use due care to find out just where the pipe

lines were, in that, without soundings or otherwise icking

adequate precautions to precisely locate the pipe lines, he

dropped the anchor on them with damaging results.

With the highly important question of primary fault

for the injury thus disposed of by our holding that the

court’s findings as to Gray’s negligence are not clearly

erroneous and must be approved, we turn to the other

questions raised by the several appellants.

2 Reais TE f

37

The first of these is the complaint of all the appellants,

including Gray, that the district judge erred in refusing

to give effect ro the pilotage clause' in the towing contract,

providing in effect that neither Gray nor the Towing Com-

pany, his employer, would be liable for the negligence of

Gray, its employee, indeed its port captain.

Of this, we think it sufficient to say that we agree:

with the district judge’s conclusion that the libellants,

strangers to the contract, cannot, of course, be held bound,

or in any way affected, by its terms; and also with his

conclusions with respect to actions over for exoneration

or indemnity that appellants are bound and precluded by

the decision and holding in Bisso v. Inland Waterways

Corporation, 349 U.S. 85, that such a clause is invalid.

In addition, we think it clear that respondents’ reliance

on Sun Oil Co. v. Dalzell Towing Co., 287 U.S. 291, will

not at all do there, both because of the decision in the

Bisso case, which, on full consideration, rejected the Dalzell

case as authority for the position here taken, and because

the Dalzell case dealt with pilotage in its real sense of

service rendered by publicly licensed involuntary or com-

pulsory pilots, and Gray in the case was not such a pilot.

Though called a pilot, he was merely the person in direct

command with respect to a dead ship towing operation

1 “Whenever any pilot goes on board a vessel to assist

her movement or handling. he becomes and continues to be

solely the servant. agent and employee of said vessel, and

her owners and/or chirterers in respect of all acts done by

him, or ail omissions, and all orders given by him to any

tugs engaged or to said vessel, or otherwise, in the movement

or handling of said vessel. or in connection with any decisions

made by said pilot as to the manner or method of handling

said vessel, and none of the tugs or their owners, agents,

masters, servants, employees or charterers shal! be responsible

or liable for any act or omission of said pilot, or for any

claims or damages caused by or resulting for (sic) any act.

omission or order of said pilot.”

+. East gt

38

who, as such, conducted the operation by coming on board.

Look at it as one will, nothing more can be made of this

case than that it is a mere case of a towing service furnished

by G & H Towing Company and pe-formed by its port

captain who. though denominated “pilot”, was merely the

one in charge of a dead ship towing operation who con-

ducted it by coming on board the dead ship, and the effort

to limit the liability of the towing company for the acts

of those furnished by it to conduct the towing maneuver

must fail here, just as it failed in the Bisso case, and the

judgment denying effect to the invoked clause of the con-

tract must be affirmed.

We are also of the opinion that there is no merit what-

ever in Gray’s claim that he is protected from liability

for his own fault by the terms of the contract, even if

it were otherwise regarded as valid. Neither is there any

merit in the claim of Maritime Overseas Corporation and

Har Canaan, that they are not liable for Gray’s acts

because, under the law governing pilotage, they could not

be held liable for the pilot’s negligence. We find nothing

in the cases cited by them, nothing in the cases generally,

which supports this claim. Indeed, we chink the cases have

settled the law to the contrary, even in a case of true in-

voluntary or compulsory pilotage. Cf. Publicker Industries,

Inc. v. Tug Boat “Neptune” Company et al, 171 F(2) 48;

United States v. Chris Nielson, 349 U.S. 129. We are, there-

fore, of the clear opinion that the court’s findings of fact

as to fault in the injury to the pipe lines cannot be set

aside as clearly erroneous; that his conclusions. that the

respondents held liable were in fact and in law responsible

to the libelants, are correct and may not be set aside; and

that all questions as to actions over for exoneration and/or

indemnity were correctly decided, and the decree is in all

things AFFIRMED.

SE ae Se A RG Se PA 0 ra Reiita FF ‘

39

APPENDIX II

FINDINGS OF FACT AND CONCLUSIONS

OF LAW

STATEMENT OF THE CASE

This proceeding is brought in rem against the Israeli

vessel] HAR CANAAN, claimed by Maritime Overseas

Corporation; in rem against the Tug J. R. GUYTON,

owned by Bay-Houston Towing Company; in rem against

the Tugs JUNO and ALBATROSS, owned by Suderman

& Young Towing Company; and in personam against Bay-

Houston Towing Company; Suderman & Young Towing

Company, and G. & H. Towing Company, the charterer

and operator df the three tugs named. and Emmett Gray,

an individual, employed as Port Captain by G. & H. Tow-

ing Company. The Libellants are Pelican Island Develop-

ment Corporation, the owner of the pipeline work which

was damaged in this casualty; Merritt-Chapman & Scott

Corporation, general construction contractor for the Peli-

can Corporation; Edwin E, Johansson, sub-contractor un-

der Merritt-Chapman & Scott for construction of water

and sewer pipelines between Galveston Island and Pelican

Island; and Kansas City Bridge Company, sub-contractor

under Johansson for the cross channel portion of this con-

struction which was immediately involved. By impleading

petition of cross-libel, Maritime Overseas Corporation asks

indemnification from the Tugs J. R. GUYTON, JUNO,

and ALBATROSS, and from all the named respondents,

for any recovery libellants may obtain against the HAR

CANAAN or her claimant, and by smpleading petition

or cross-libel, those same respondents jointly and severally

ask indemnification from Maritime Overseas Corporation

for any recovery libellants may obtain against them.

40

A trial having been had on the issues of liability alone,

and having received and considered the evidence and the

briefs and arguments of the proctors for the respective

parties, these Fndings and Conclusions are made by me

pursuant to Admiralty Rule 461.

FINDINGS OF FACT

1. The channel between Galveston Island and Pelican

Island is a part of the Galveston harbor. Slip A is im-

mediately west of Pier 41 on the Galveston Island or

southerly side of this channel. The width of the channel at

this point is approximately 1400 feet, and the channel at

this point is dredged to a depth of approximately 35 feet

between the harbor lines, a distance of 1125 feet.

2. On April 12, 1956, a permit was issued to libellants

through the office of the United States Corps of Engineers

for the construction of water and sewer mains, each ap-

proximately 12 inches in diameter, to be laid in a trench

across the Galveston channel, and at a depth not less than

$0 feet below mean low water. By amendment of thie per-

mit on December 16, 1957, the center line for this cross-

ing, at the southerly or Galveston Island end, was estab-

lished at a point which the evidence shows to be approxi-

mately 18 feet eastward from the northeast corner of Slip

A, and the line of bearing for the crossing from that point

was N 10° 23’ 25”, or almost directly across the channel

to a point opposite on Pelican Island.

3. Acting under this permit, as originally issued and so

amended, Merritt-Chapman, as general contractor for the

Pelican Corporation, contracted with Johansson for the

construction of these pipelines, and Johansson in turn sub-

contracted to Kansas City Bridge Company that part of

the work which involved laying the sub-aqueous lines. A

41

‘trench was dredged across the channel to the necessary

depth of 511% feet, which was approximately 16 feet deeper

than the normal depth of the channel between the harbor

lines. The dredged trench followed the center line of the

crossing as established by the amended permit, and extended

about 50 feet to either side of that centerline. This portion

of the work was completed prior to November 27, 1957,

and soundings of the trench were made by the United States

Corps of Engineers on that date. Late in 1957, Kansas City

Bridge Company began receiving sections of the steel pipe

to be laid at a job site-at the Pelican Island end of the cross-

ing, and for sometime thereafter was engaged in welding

short sections of this pipe into 400 foot lengths, testing

the welds, and covering this pipe with a protective wrap-

ping. Meanwhile, in December, 1957, and January, 1958,

a large “whirley” or crane barge was used to dredge the

ends of the trench, outside of the harbor lines. A cavein of

the bulkhead at the northeast corner of Slip A, caused by

this dredging, was repaired in December, 1957. In January,

1958, a bulldozer was used to cut a 400 foot ditch on

Pelican Island into which the long sections of pipe could

be placed preparatory to their being drawn into the water.

4. On January 27, 1958, pulling cables were stretched

across the channel, and the leading section of each pipeline

was hung below a barge at the Pelican Island end. On the

ensuing four days, the two p’pelines were drawn behind

this barge and laid in the trench across the channel which

had been dug to receive them. On January 31, 1958, the

channel was cleared again for marine trafic. Between

February 6 and February 25, 1958, the whirley barge wa;

employed as riser sections were welded to the two pipe-

lines, first at the Galveston Island end, then the Pelican

Island end. Between February 27 and March 4, 1958, divers

42

were used to walk the pipelines and ascertain their position

and alignment. The whiriey barge was used to uncross the

lines at one point in mid-channel during this work. On

March 5, the lines were filled with water for hydrostatic

pressure tests, and they remained filled with water until

the later casualty.

§. The remaining work on the pipelines prior to the

casualty in suit, which occurred on March 21, 1958, was

concerned with the construction of a thrust block over the

risers at the Galveston Island end, just east of the entrance

to Slip A, and itnmediately in front of the bulkhead be-

tween Slip A and Pier 41. Sleeves were welded around the

risers where they passed through the bulkhead, a wooden

form was constructed for the thrust-block, and this was

lowered into place over the risers after the ground had

been cleared by a diver. On the morning of March 21,

and at the time of the casualty, concrete was being poured

for this thrust-block. A diver was then below directing

this work, and his tenders were on the deck of the whirley

barge which lay at the northeasterly corner of Slip A, and

partly into that Slip. The crane of the whirley barge ex-

tended over the work area. On the channel side of the

bulkhead, a small “sea mule” and a larger flat barge were

immediately above and adjacent to the work area, and per-

sonnel employed by Kansas City Bridge Company were on

these work boats as well as upon the bulkhead.

6. In addition to the physical evidence already related

showing the construction and placement of these pipelines

across the channel, and to the notice thereof contained in

the permit issued by the United States Corps of Engineers,

at least three “Notices to Mariners” had been issued by

the Corps of Engineers, on November 15, 1957, December

25, 1957, and January 16, 1958, advising of this construc-

43

tion. On December 30, 1957, double signboards, measuring

7 feet 10 inches, by 16 feet. on each face, and bearing

large letters reading “WARNING. -PIPL CROSSING—

DO NOT DRAG ANCHOR” were placed on either side

of the channel, the sign on the Galveston side being centered

about 31 feet east of the center line established for the

crossing, and the sign on the Pelican side being centered

about 115 feet east of this center line. The legend of either

sign was easily visible to any ship proceeding up or down

the channel.

7. The Israeli ship HAR CANAAN is a dry-cargo ves-

sel of 10,311 gross tons, Her length is 515 feet 2 inches,

and her beam is 66 feet 7 inches. She carried two anchors

forvard, each weighing approximately 8900 pounds. Ac—

the time of this casualty the ship was light and drawing

approximately 10 feet. Her forecastle deck was approxi-

mately 40 feet above the water line, her bridge deck was

approximately 60 feet above the water line, and the hori-

zontal distance from the hawse-pipes in the bow of the ship

to the bridge was about 200 feet.

8. On the morning of March 21, 1958, the HAR

CANAAN was fully manned, equipped and seaworthy

excepting that her main engines were shut down for re-

pairs. Her agents at Galveston, Strachan Shipping Com-

pany, gave an order to Bay-Houston Towing Company

to furnish three tugs and a pilot to move the HAR

CANAAN as a “dead” ship from Pier 15, where she was

then lying, to Sunset Grain Elevator at the inner end of

Slip A. The distance between these points was approxi-

mately two miles.

9. Bay-Houston Towing Company held a contract with

Maritime Overseas Corporation, operator of the HAR

CANAAN, to move its vessel on stated rates and terms.

44

10. The only towing companies offering tug service for

shifting ocean going vessels in the port of Galveston at

the time in question were Bay-Houston Towing Company,

Suderman & Young Towing Company, and Intracoastal

Towing & Transporation Company. Each of these com-

panies owned a nuraber of harbor tugs. These three “‘own-

ing companies” competed with one another in the sense

that they solicited their own business, made their own

contracts, and invoiced the towed vessels for the service

performed, However, the services which were available to

the owners and operators of ocean going vessels in the port

of Galveston from the three “owning companies” were

identical. This comes about in that the three “owning com-

panies” did not 6perate their own tugs, bur all three

chartered, bareboat, their tugs to G. & H. Towing Com-

pany, an operating Company, which was owned jointly by

the three “owning companies”. In carrying out the orders

for towing service, G. & H. Towing Company would use

the tugs which were most readily available and convenient,

without regard to the ownership, and regardless of which

of the three “owning companies” may have had the con-

tract with the vessel to be towed. The contracts between

the “owning companies” and the vessels (or their owners

or charterers) expressly allowed for performance in this

manner. The contracts offered by the three “owning com-

panies” (their owners or charterers) were identical in terms,

and upon a single printed form. The rates too were the

same, save for an exclusive contract a ten percent (10‘, )

reduction was allowed. The contract with Maritime Over-

seas was of this nature, and carried the ten percent (10°, )

discount.

11. Among the other provisions of this contract, to

which reference is made for all purposes, was the following

45

provision, which by reason of its significance is quoted

here:

“Whenever any pilot goes on board a vessel to assist

her movement or handling, he becomes and continues

to be solely the servant, agent and employee of said

vessel, and her owners and/or charterers in respect to

all acts done by him, or all omissions, and all orders

given by him to any tugs engaged or to said vessel or

otherwise, in the movement or handling of said ves-

sel, or in connection with any decisions made by said

pilot as to the manner or method of handling said

vessel, and none of the tugs or their owners, agents,

Masters, servants, employees or charterers shall be re-

sponsible or liable for any act or omission of said pilot,

or for any claims or damages caused by or resulting

for any act, omission or order of said pilot.”

12. Captain Emmett Gray, one of the respondents, is

full time ‘and salaried employee of G. & H. Towing Com-

pany. Prior to March 1, 1958, he had served for several

years as night dispatcher for G. & H., and on that date he

became Port Captain for G. & H., and was placed in full

charge of the dispatching office. Since 1932, he has held

an unlimited pilot’s license covering Galveston harbor, as

well as other adjacent waters. As Port Captain for G. & H.,

he was the “dead ship” pilot assigned by his employer for

all shifting of dead ships within Galveston harbor when

the tugs operated by G. & H. were employed. Out of the

fixed charge made for shifting a vessel without her power,

Captain Gray received a percentage of this charge (in addi-

tion to his salary from G. & H.), with the balance of the

charge going to the company owning the contract (one

of the three “owning companies”), and G. & H. as the

operating company. In this regard, it should be noted that

Captain Gray’s duties with G. & H. did not contemplate,

46

nor did he accept, employment as a harbor or branch pilot

(meeting incoming vessels at the sea buoy, and bringing

them, usually under their own power, into Galveston har-

bor, with converse seivice for out going vessels.)

13. On the morning of March 21, 1958, Captain Gray

boarded the HAR CANAAN as she lay at Pier 15, and

assumed the conning of the vessel. He informed her Master

ot his intention to use the port anchor in turning the ship

into Slip A. and the First Mate of the HAR CANAAN,

with a deck crew, was stationed in her bow and the anchor

made ready for use on orders from the bridge. Thereupon,

the HAR CANAAN was moved westerly down the chan-

nel toward Slip A, with the Tugs JUNO, ALBATROSS,

and J. R. GUYTON, made up alongside and providing the

only motive and directional power for the vessel under

orders given directly to them by Captain Gray from the

bridge of the HAR CANAAN. The Master of the HAR

CANAAN was also upon the bridge of his vessel at all

times during the maneuver, and he relayed to the First

Officer in the bow and the crew orders as received from

Captain Gray during the maneuver, including the order

to let go the port anchor. The helm of the HAR CANAAN

was lashed, as her propelling machinery was shut down, and

she had no steerageway of her own.

14. Shortly after noon, as the HAR CANAAN reached

the vicinity of Pier 41, she was navigated by the tugs at

an angle from the center of the channel toward the open-

ing of Slip A. Captain Gray then ordered the port anchor

to be dropped, with one shot of chain, and this order was

promptly executed. Subsequently, the bow of the ship,

with anchor down, continued to move toward the north-

east corner of Slip A and came within about 10 feet of con-

tact with the whirley barge in that position before the

anchor was heaved in some five minutes later. Almost im-

47

mediately after the anchor was dropped, violent move-

ments of the sewer pipe, which was westerly of the two

pipes being laid, were perceptible to the workmen on shore

as well as to the diver working underwater. Sounds such

as would have been caused by the breaking of the pipe-

line were also heard by the workmen on shore when the

anchor of the HAR CANAAN was heaved in. Subsequent

investigations did show that the sewer line was badly bent

or broken, but still in the trench, at a point approxi-

mately 250 feet out in the channel, and was completely

broken at a point only 90 feet from the bulkhead, with

the ends of the pipe at this point pulled out of the trench

and lying in front of the opening to Slip A.

15. Immediately prior to the arrival of the HAR

CANAAN at Slip A on the 21st of March, 1958, the

water and sewer lines were being constructed Ly libellants

in accordance with the permit duly issued for that pur-

pose, and these two pipelines were properly situated at the

depth and in the position prescribed in such permit, as

amended December 16, 1957.

16. The port anchor of the HAR CANAAN was

dropped on, or dragged over, one, or perhaps both of said

lines, on March 21, 1958, breaking the sewer line, the more

westerly of the two, and causing damages to each of the

libellants in amounts to be determined.

17. Captain Gray was neg'igent in giving the order to

drop the anchor when he shou!d have been aware of the

construction and presence of the pipelines from general

knowledge, the Notices to Mariners, and the prominent

warning signs which were plainly visible.

18. Captain Gray was not misled by the position of the

warning signs, and was negligent in giving the order to

drop the anchor without regard to the presence of the pipe-

lines,

48

19. The tide was nearing the end of the ebb, and the

wind was from the southeast at force three, although

neither weather, wind nor tide were factors of any con-

sequence in the handling of the HAR CANAAN at the

time, and no emergency or necessity required that the

anchor be dropped at the place where it was dropped.

20. Captain Gray was acting within the scope and course

of his employment by G. & H. Towing Company at all

times material hereto, and was not a loaned servant to

the vessel or her operators at such times.

21. The Master of the HAR CANAAN was not nezgli-

gent in failin, to intervene, or displace, the pilot when

the order to drop the anchor was issued by Captain Gray,

because the situation was not one of obvious danger, and

the pilot’s lack of knowledge was not manifest so as to

warrant intervention by the Master.

22. Neither the Master nor crew of the HAR CANAAN

was negligent, or at fault, in any particular.

23. The assisting tugs were properly maneuvered by their

crews in accordance with orders given them, and were in

no way at fault.

CONCLUSIONS OF LAW

1. Captain Emmett Gray is personally liable for his own

acts of negligence.

2. G. & H. Towing Company is liable for the negligence

of Captain Gray as its employee.

3. The HAR CANAAN is liable, in rem, for the negli-

gence of Captain Gray as her pilot.

4. Libellants are entitled to recover their provable dam-

ages, as their interests may appear, from the HAR

CANAAN, in rem, from G. & H. Towing Company, in

personam, and from Emmett Gray, individually. The lia-

bility so decreed shall be joint and several.

49

§. Libellants are not entitled to recover from che tugs

J. R. GUYTON, JUNO, or ALBATROSS, in rem, or

from Bay-Houston Towing Company or Suderman &

Young Towing Company, in personam.

The foregoing Conclusions dealing with the liability of

the respondents to libellants, in my judgment, follow quite

readily from the Findings of Fact set out above, and pre-

sent no serious question of law.

The libellants obviously were not parties to the contract

of towage between Maritime Overseas ind Bay-Houston,

and the liability of respondents to libellants has been deter-

mined without regard to the provisions of such contract.

In considering the question of liability over between’

the various respondents,, however, the validity of the so-

called “pilotage” clause (Finding No. 11) is placed in issue.

Maritime Overseas contends such provision is void, as

contrary to public policy, relying primarily on Bisso 1.

Inland Waterways Corp., 349 U.S. 85, and the related

Opinions immediately following. Respondents G. & H. and

Captain Gray in supporting the validity of the exclupatory

provisions rely primarily on Sun Oil Co. v. Dalzell Towing

Co., Inc., 287 U.S. 291.

Under the facts found above, in my judgment, Bisso is

controlling, by reason of the following circumstances,

which I consider to have been stressed by the Court; (a)

the vessel was being moved entirely under the power of

the furnished tugs, and without power or control of her

own; and (b) by reason of the monopolistic situation

which prevailed in the vicinity of Galveston harbor, where-

by a vessel had no freedom of choice in the type of towing

contract offered, but must accept a contract with such

exculpatory provisions if in fact it was to secure the assist-

ance of tugs in its movement. Here, as in Bisse, the vessel

was under complete control of Captain Gray, as an em-

. 50

ployee of the towing company, and such towing company

did “have power to drive hard bargains.”

The instant case is distinguished from Dalzell in these

same particulars, for there the Court points out (a) “It

was not shown that respondcnt was to have or at any time

did have control of the tanker or that it agreed or under-

took to co more than to furnish tugs to assist her while

using her own propelling power.”; and (b) “Respondent

had no exclusive privilege or monopoly in respect of the

services that petitioner desired to have performed for its

CONE 6-6 2 There is nothing to suggest that the parties

were not on equal footing or that they did not deal at

arm's length.”

Thus, as to the liability over between the several respond-

ents, the following Conclusions are made.

6. G. & H. Towing Company and Captain Emmett

Gray are not entitled to indemnity from Maritime Overseas

Corporation, or from the-HAR CANAAN, for any pay-

ment they may be required to make under the decree to

be entered herein.

7. Maritime Overseas Corporation, as claimant of the

HAR CANAAN, is entitled to indemnity from Captain

Emmett Gray, individually, and from G. & H. Towing

Company for any liability it will have to libellants under

the decree to be entered herein. The liability of Captain

= Gray and G. & H. Towing Company to Maritime Overseas

will be joint and several.

The Clerk of the Court will furnish counsel of record

a copy hereof.

Counsel will present appropriate order promptly.

Done at Houston, Texas, this 24th day of December,

1959.

BEN C. CONNALLY

United States District Judge

51

APPENDIX III

No. 18619

JUDGMENT

Extract from the Minutes of March 15, 1961

EMMETT GRAY, G. & H. TOWING COMPANY,

and MARITIME OVERSEAS CORPORATION,

Appellants

v.

EDWIN E. JOHANSSON, KANSAS CITY BRIDGE

COMPANY, MERRITT-CHAPMAN & SCOTT

CORPORATION and PELICAN ISLAND

DEVELOPMENT CORPORATION,

Appellees

This cause came on to be heard on the transcript of the

record from the United States District Court for the

Southern District of Texas, and was argued by counsel;

ON CONSIDERATION WHEREOF, It is now here

ordered, adjudged and decreed by this Court that the decree

of the said District Court in this cause be, and the same

is hereby, affirmed;

It is further ordered, adjudged and decreed that the

appellants, Emmett Gray and G. & H. Towing Company,

be condemned to pay the costs of this cause in this Court

for which execution may be issued out of the said District

Court.

$2

APPENDIX IV

PERTINENT CONTRACT PROVISIONS

BAY-HOUSTON TOWING CO.

* *# *

“The rates quoted herein, and the furnishing of tug

power for harbor or other towage undertaken hereunder,

are founded on the consideration that this agreement shall

not be construed to be a personal contract, and it is under-

stood that

BAY-HOUSTON TOWING COMPANY

and the parties at interest with us shall have the benefit of

the exemption from liability contained in the United States

Limitation of Liability Statute, Title 46 U.S.C.A. 181 to

184, both inclusive. ,

, 195

“The Bay-Houston Towing Co. offers to meet your

steamers upon arrival at Galveston, Houston, Texas City,

Corpus Christi, or Port Aransas, and provide tugboat power

for your steamers while in port, in accordance with tow-

boat tariff shown herein and conditions named therein.

“Should Bay-Houston Towing Co. tugs be not con-

veniently available for the required services, the said Bay-

Houston Towing Co, shall have the right to designate or

engage the tugs, and such other tugs and their owners or

operators shall be covered by this contract as though they

were Bay-Houston Towing Co. tugs.

53

“Whenever any pilot goes on board a vessel to assist her

movement or handling, he becomes and continues to be

solely the servant, agent and employee of said vessel, and

her owners and/or charterers in respect of all acts done

by him, or all omissions, and all orders given by him to

any tugs engage or to said vessel or otherwise, in the move-

ment or handling of said vessel, or in connection with any

decisions made by said pilot as to the manner or method of

handling said vessel, 1nd none of the tugs or their owners,

agents, Masters, servants, employees or charterers shall be

res ,onsible or liable for any act or omission of said pilot,

or for any claims or damages caused by or resulting for

any act, omission or order of said pilot.

“This contract to become effective on the date shown

above and to remain in force until —

and to continue thereafter from year to year until cancelled

by either party on an anniversary date of this contract.

After written notice, rates named herein may be adjusted

in the light of increase or decrease in operating expenses

due to changes in laws or regulations and changes in work-

ing conditions of labor and labor co's in all branches.

“All charges are net, except when services are performed

under contract, then a discount of 10‘, is to ipply on all

tariff rates.

BAY-HOUSTON TOWING COMPANY

abide cic setdeasseatcencla slit satcanaladeairaaieie

Se ee ee ee eee ee ee ee a es

54

ACCEPTANCE

“We accept the offer of the Bay-Houston Towing Co.

for all tug power our steamers, or steamers operated for our

account, unless otherwise bound by charter may require

at the Ports of Galveston, Houston, Texas City, Corpus

Christi and Port Aransas, in accordance with the rates and

conditions named in tariff shown herein.

By ”

(In the provisions covering Assisting Vessels, at Galves-

ton-Texas City, but not under the provisions for services

at other named ports, the contract had a provision “Pilot-

age-Shifting Vessels Without Own Power..... 60.00”)

-

55

APPENDIX V

B H |

TUGS:

Cc. R. HADEN LAURA HADEN

H. 0. WEATHERBEE LUCY HADEN

J. R. GUYTON R. T. McDOW

JENNIFER GEORGE R. J. WALES

W. A. WANSLEY

Pa BARBARA GEORGE

J. HARRIS MASTERSON

TUG BOAT HARBOR TARIFF

EFFECTIVE APRIL 10, 1957

BAY-HOUSTON TOWING CO.

GALVESTON HOUSTON

504 National Hotel Bidg. 811 Cotton Ex nange Building

Phone 5-9381 Phone: CApitol 2-6231

Pier *. Wharf Phone: 3-4673 Dock Phone: W Ainut 8-5406

83-4673 - 5-7534 JAckson 4-8635

Night Phones :{ 5-6542 Night Phones :{ UNderwood 9-2701

CORPUS CHRISTI

Ore Dock

Phone: TUlip 4-8791 & TUlip 3-7843

Night Phone: 53 Ingleside

Gelf Coast Towing, Harbor Towing, 08 Lightering

and Transportation

OIL BARGE IFS 201

CORRESPONDENCE AND WORK SOLICITED

B Teg Calls: diols (Leng, Short, Leng)

H Teg Cals: aaictesn ____( Leng, Short, Leng, Shert)

SRA SSN ER He Ast tae EPS oe newer ee

MICRO ¢

TRADE M

56

TOWBOAT HARBOR TARIFF

GALVESTON, TEXAS CITY AND HOUSTON SIIP CHANNEL

GALVESTON — TEXAS CITY

“lovking or Off Docking. at Gatvston. per tug $190 60

Stifung Dock to Dock per tag 205 00

Off docking and to Botwar Reads. per tug 230 00

Off docking and to Texas City and Decking. per tug 330 00

BKonvar Roads to Texas City or vice versa per tag 230 00

Dorking Off Docking, or Shifting at Texas City, per tus nw oe

Towing vessels oc ocean barges from Gaivestor Bart) Hel.var Roads Texas (ty or Galves

ton Docks, per tug 1 hour or fractional part 105 Ov

Running time chargeabie

Shifting derrick barges —Gaeivesten Harbor &S 00

Galveston to Bolivar Roads BS 06

Galveston te Texas City 135.00

Vietage Shifting Vessels Without Own Power 60 OH

SPECIAL SERVICES

Vultiag on Cay aground

When tug is engaged in assisting vease!. one-half hour free pulling time each succeeding hour or

fractiona| part s wor

When Tug not engaged in assisting vesse! Ver howr or fractions) part 95.00

Running time chargeabic

Purnm@iing and dehvernng water tc ships at anchorage Per Trp 200 00

IN TOWING VESSELS OF BARGES TOWED VESSELS TO FURNISH HaWwSERS

When Tug ordered to certain points to perform services and ordess cancelied after Tug jenves berth minimum

charges of $6000 at Galveston and $9000 at Texas City wii he made

Detention caused by vease! not being ready at time specified when tug ordered to be charged for a! $60.00 per

hour with one-half hour free time allowed

HOUSTON SHIP CHANNEL

BETWEEN

Morgans Pout and Ordnance Depot, Shel), Port Adams. Todd Shipyards or Sheffield $380 OF

Morgans Pont and Baytown 220 OF

Helivar Roads and Morgans Pomt or Baytown 430.00

Bolivar Roads and Ordnance Depot. Shell, Port Adams. Todd Shipyards or Sheffiek 455.00

Galveston and Baytown 440 0H

inne City and Baytown Ra 440.00

ouston ant Noreworthy, Crown, Galena or Sinco 240 00

one and — Shipyards, Port Adams, Sheffield, Shel) or Ordnance Depot 330 00

(alveston and Housten 580 OF

Bolivar Roads and Houston S80 00

Texas City and Houston 580 00

Morgan's Point and Houston 430 00

Hw Bay 405 OF

Baytown and Ordnance Depot. Sheil, Port Adams. Tedc SSipyards or Sheffield 3RO 00

(Norsworthy Crown Galena Sinco Clinten Manchester take same rates as Houston from above points |

: Above charges ieciuding Docking of Off Docking

TOWBOAT HARBOR TARIFF

GALVESTON, TEXAS CITY AND HOUSTON SHIP CHANNEL

HOUSTON SHIP CHANNEL

DOCKING AND OFF DOCKING

Deeting of Off Docking at all pont: between Manchester Terminal and Turn ng Hasin Goth melusive Simo Oe

Decking of OE Dorking at pont. telow Manenester to Norsworthy imelusis. 19 OF

Dorking of Off Decking a! pornts below Norswerthy to Ordnance Depot ineiusics 240

Decking or Off Dorking af Baytown a Oe

SH'FTING

Shifting vessel. between ducts at Manchester Terminal an! Turning tas beth onelasce per tug $20. 00

Shifting vessels between points teiow Manchester to Norsworthy onectusrw: per tug 20 Ow

Shifting veasets from one pont & another on the same dock between port. Selow Norsworthy to Ondnanes

Depot metus: ve 20 08

Shifting vesseis between ports below Norsworthy to Shei inciusive per tug 380 00

Shiftang from on berth to another at Bayt en 230

MISCELLANEOUS SERVICES

Pulling on ships aground

When tug is engaged! in assinting vesse! one half heur free pulling time ach succeeding hour or

fractiona! part 80 00

When tug is not engaged in assisting vesse! per hour or fractional part oo

Running time chargeable

The above rates to a for a mingle tug

vgs to stand by but not put tc work wil! be charged for the same as if pulling

Kates for tow dead ships between points on Houston Ship ( hanne other than above speefied. will be charged for

on “pulling ume basis ~

All towed vessels to furnish towing hawsers

Holding vessels off dock and redocking shifting rates to apply

Standing by or hoiding vesse! in stream or alongmide bank waiting for berth pulling time rate will apply

When T ordered to certain points to perform services and onmters caneriied after Tug leaves berth minimum

ree of $60.00 w)\\ be made

Pemunibien and delivenng water to ships Ver Trip 200 Ov

letention caused by vesee! not being ready at time specified wher tug ordered tbe charged for at $60.00 per hour

with one half hour free time allowed

PORT ARANSAS— CORPUS CHRISTI

Decking off docking or shifting at Harber isiand S2R0

Aamsting between ‘Harter Istand and Corpus Chrvet 430 U0

Sea to Ingleside BRO 00

To dock at ingtenae

When tug is at Ingiemde 290 Oo

When tug is not at Ingiesmde 380 00

Asmeting between ingieeids and Harte: tolan! 2RO 00

A between ingie de and Corpus Christ. pe 380 OO

Sea to Chrmat: and dock “3 430 00

From bridge at Corpus Christ: and to dock at Turning Hasin wharves 210 00

To dock at wharves in ( . nest. Turning Hasire 180 00

“Sh in Corpus Chovat) Turti.g Basin 205 00

Sea to Termina! of the Reynolds Meta! (ompany (Near ingi side) 395 ©

Decking or undo-king at Terminal of the Keynolds Meta) Company (Near Ingieside) 395 00

Prom outesde bridge to al! points between Sunray Dock ane ()) Docks | & 4 inciunive 230 66

From Turmng Basin inside the bridge to above docks 220 00

Te decking or off docking at above dorks 220 08

To shiftang between above docks or between above docks and docks in Corpus Christ) Turning Basin 220 00

Puthng on ships aground

When tug i engaged ir asaiatin. «esse! one half nour free puiling time each sucereding hour or

fractiona! par #0 00

When tug i net engaged m assisting vesse) per hour or fractional part 95 00

ume

When Tug ordered to certain points to perform services and orders canceiied after Tug leaves berth min

imum charges of $60 00 at Corpus ( hmst: and Harber Isiand and 89°06 at Ingiemde wil) be made

The above rates t apply for « single tug

Detention (ne half hour free time ye oer hour 60 00

Furneshing and deliwernng water to ships at Harbor sian’ Ingiesse or ‘ orpus Chet) Per Trp 200 06

OVERTIME RATE

20% will be added to the anf! rates for al! work performed between Ue nours of © IM and ° AM ais for work

performed on Sundays and Holiday» and Mondays folowing Holdays

‘rvertome Rate to apply when service ix started and of completed in an overtime Nour

Starting time wri! be the time Tug leaves berth and time of compietion wo be the tome Tug returns te berth

58

FORCE MAJEURE e

Neither party shall be responsible for delays, failures or omission hereunder due to strikes.

jockouts. labor disturbances, cots, fire, earthquakes, storm, hghtning. epidemics, war disorders,

acts of God, etc

The rates quoted herem. and the furnishing of tug power for harbor or other towage under-

taken hereunder, are founded on the consideration that this agreement shali not be construed to be

a personal contract, and it is understood that

BAY-HOUSTON TOWING COMPANY

and the parties at interest with us shall have the benefit of the exemption from lability contained

in the United States Limitation of Liability Statute, Tithe 16 [ S.C.A. 181 to 184, both inclusive

iene ~ %...

The Bay-Houston Towing Co offers to meet your steamers upon arrival at Galveston, Hous

ton, Texas City, Corpus Christi. or Port Aransas, and pros ide tugbeat pewer for your steamers

while in pert, in accordance with towboat tariff shown herein and conditions named therein

Should Bay-Houston Towing Co tugs be not convementls available for the required services.

the said Bay-Houston Towing Co. shall have the right te designate or engage the tugs, and such

other tugs and their owners or operators shall be covered by this contract as though they wer:

Bay Houston Towing Co tugs

Whenever any pilot goes on beard a vessel te assist her movement or handling, he becomes

and continues to be solely the servant, agent and emplovee of said vessel, and her owners and/or

charterers in respect of all acts done by him, or all emissions, and all orders given by him te any

tugs engage or te said vessel or otherwise in the Movement or handling Of said vessel, or in con

nection with any decisions made by said pilot as te the manner or method of handling said vesse.,

and none of the tugs or their owners, agents, Masters, servants, employees or charterers shall be

responsible or lable for any act or omission of sard print, or for any claims or damages caused by or

resulting for any act, omission or order of said pilot

This contract to become effective on the date shown above and to remain in foree until

and te continue thereafter from vear to vear until cancelled by either

party on an anniversary date of this contract After written notice, rates named herein may be

adjusted in the light of increase or decrease in operating expenses due te changes in laws or regu

jations and changes tn working conditions of laber and labor costs in all branches

All charges are net. except when services are pe rformed under contract, then a discount of

10%. is to apply on all tariff rates

BAY HOUSTON TOWING COMPANY

ACCEPTANCE

We accept the offer of the Bay-Houston Towing Co for all tug power our steamers, or

steamers operated for our account, unless otherwise bound by charter may require at the Ports of

Galveston, Houston, Texas City, Corpus Christ: and Port Aransas, in accordance with the rates

and conditions named in tariff shown hereim

Oye