Brief for Respondent — Lake Tankers Corp. v. Henn

Office : Supreme Court, U.S.-

ne | FILED

UP Rey OY ] APR 2 71987,

e RR ie pe gga Sibert, — eo e

* ti . Bie | JOHN t. FEY, Clerk

reme Court of the Ynited States

October Term, 1956

No. 445

LAKE TANKERS CORPORATION,

Petitioner,

against

Luin M. Henn, Administratrix,

a a ; .

yo! . is Respondent.

Ow Writ or CERTIORARI TO THE UNitED States Covrt oF

APPFALS FOR THE Spconp Circuit

af

.. j

BRIEF FOR. RESPONDENT

Frank (. Mason,

25 Broadway,

New York 4; N.Y.,-

Counsel for Respondent.

Darr Roacow ; ‘

aS tele INDEX

bs a . oe PAGE

Se eis ; | |

SMI RUMI 5 as cee saab vie tans eu sib Sv ee oe pe 1

Bo te: tn a a ee Sari re

BomMARY OF ARGUMENT «3. 2.65. eee iirc ieee ees S;:

y ARGUMENT: | ;

a. I. The adequacy of the funds in the limitation pro-

ceeding i is amply establish > Re ern Pe eee 12

Il. ‘Ona finding of an edsauiis fund it is a proper

exercise of discretion to grant leave to prosecute

- a claim outside the concourse ..........6.5..... 16

Ill. The prosecution of ‘respondent’ s ‘state court action

would not violate the admiralty jurisdiction of

limitation but would determine only *issues of

at negligence and damage, subject always to. peti-

os —tioner’s limitation right in admiralty .......... ~ 2

a ee, : :

- Conciusion. For the.reasons Stated it is respectfully

submitted that+the judgment , of the court below.

should be affirmed ........0.... Peer pry errr. <<

.

~

ll

' Cases CITED

; PAGE

Nedteaae: The, 14 F. 2d 456, 458, affirmed 20 F. 2d

ae Se 1 Be ae Or ye gerry 11

Asfalto, 45 F. 2d 857, 859 (D.C. S. D. 8 Y.) ........ ae

Bisso, Jr. v. Inland W aterways Corp., 349 U. S. 85,

99, ee ae Pees Rae GS Srey oe. ais

. Curtis Bay Towing Co. v. Tug Kevin Moran Inc., 159

Oa S00, SIG.0C. B.S) oes 5c en te's peti aianrecs 11

Hartford Accident & Indemnity Co. v. Southern Pacific — -

Co., 273 U. S. 207, 357, $50 .....3 aE eer ae 17

Langness v. Green, 282 U. 8. 531, 543 .. 10, 11, 16, 28, 25, 27 ”

Liverpool, ete. Nav. Co. v. Brooklyn Eastern District

Terminal, 251 U.S. 48 .............5. ee coves: ae

Maryland Cas. Co. v. Cushing, 347 U. S. 409,

: a ee Se a eer Ee ee ee Fr 12, 17, 22, 26, 28

. Matter of Trinidad Corp., pee December 28th, 1955,

229 F. 2d 423 (C, A. 2) ....... "5, 11, 17, 18, 21,.22, 25, 32

Petition of Lake Tankers Corp.; 137 F. Supp. 311, 313

| pean 11, 12, 13, 14, 15, 25, 28, 32,33 ,

Petition of Moran Bransportation Corp., 185 F. 2d 386, |

ey I. ee OP oak seks 5 heeds Vaasa ts 11

Petition. of Red Star Barge Line, Ine., 160 0 F. 2d 436

Oe Re cco che co as oa eee es eee 7 ae

Petition of Southern Steaniuhen Co., 132 F, Supp. 316,

| Es CS ons ohne ereassvcdeee- 4aeeeeees 11, 25.

Petition of Texas Co., 213 F. 2d 479 (C; A. 2). . 4,11, 17, 21,

22, 25, 26; 32

Petition of Trinidad Corp., 229 F. 2d 423, 428 (C. z A.2) 10,

Petition of U. S., 178 F. 2d 243, 252 (C. A. ) ey -10, 30

Southern ae v. U.S., 72 F. 2d 212, 214 (C. A. 2). “10, 30. :

é

. Supreme Court of the Buited States

OcroserR TE RM, 1956

No. 445

\

Lake TANKERS CORPORATION,

. Petitioner,

against

Liuuas M.. Heyy, Administratrix,

Respondent,

2 7

On Writ or Certiorary To TI Unitep States Court oF

APPEALS FOR THE SECOND CIRCUIT.

BRIEF FOR RESPONDENT

Question Presented |

Respondent takes issue with the accuracy and propriety

‘of tlie language of the question presented at page 2 of peti-

tioner’s brief. The District Court and the Circuit Court of .

Appeals found that the aggregate of the claims is not

.. greater than the limitation funds, as pefitioner states in

the question.

The District Court said:

‘Fach - limitation fund is clearly in excess of the

claims asserted against each vessel.’’ Petition .of

_ Lake Tankers Corp., 187 Fed. Supp. 311, $13; Ro 59.

The Court of Appeals also held:

‘Consequently there was not an insufficient fund in 7

respect of petitioner’s liability either as owner of the

tug or as owner of the barge.’’ Petition of Lake

Tankers Corp., 232 F. 2d 573, 577; R. 61.

2

‘This important finding of both Lower Courts renders

the question presented defective as without. factual foun.

dation. :

Statement of Case ar

Responden nt’s claim arises from the death of her hus-

band, Robert C. Henn, resulting from a collision-of the peti-—

tioner’s barge LTC No.-38, in tow of its tug Fastern Cities,

on the early morning of. July 10th, 1954 in the Hudson

River, above Poughkeepsie, New York, with the pleasure -

yacht Blackstone,'on which the deceased was a passenger.

~ He was thirty-six’ years of age and left him surviving his

wife, the claimant herein, of. the age.of thirty years and |

‘three daughters 1“ ages 9,5 and 3 years. His body was not

recoyered (im. 26, 28). |

This sequence of legal proceedings followed the oc-

currence: . ah

September 20th, 19 hi Latiers of Administration were

issued to claimant by the .Surrogate’s Court, Dutchess

gg. (R. 19-20).

- September 22nd, 1954--She instituted suit, as such ad-

ministratrix, against petitioner, as owner of tug Eastern

Cities and harge LTC No. 38 alleging negligence of the

_ petitioner and its servants in charge of the operation of -

both the tug and barge. Clyde Roan, owner of the yacht

Blackstone, was also named as a defendant, and damages

were claimed against both defendants i in the sum of $500, 000

(R.3).

October 6th, 1954—A Visitation petition was filed in

the Southern District by petitioner, alleging ownersiip of

' the tug Eastern Cities and the barge LTC No. 38, that it

had used diligence to make both vessels seaworthy, that

the loss of life and property damages resulting from the

collision were not caused through any fault on its part, or

the Eastern Cities or the No. 38. Its petition made no

reference to the value of the barge LTC No. 38, but‘alleged:

~

3

that the tie Eastern Cities’ value did not exceed $110, 000

and tha#@the pending freight was $8,542.21, that petitioner |

believed that the entire aggregate value ‘‘of its interest

in said Easteri Cities’’ did not exceed: $118,542.21, for.

which it offered a stipulation for value.in that amount,

‘*said-sum being not less than the aggregate value of peti-

tioner’s interest in said tug and her pending freight’. It

also alleged that there were no unsatisfied demands or liens ~

‘against the Eastern Cities, her engines, ete., or her pend-

ing freight’’. The ‘petitioner prayed, among other things,

for appraisement: of its interest in the tug Eastern Cities

and that it. liability, . if found, be limited to the value of

its interest in said tug and her pendjng freight, that it be

. . . ey. a ‘ . +

discharged from all-liability upon the surrender of ‘*sucli

interest’? and that the money surrendered be, divided pro

rata among such claimanfs as might duly prove their

claims (R. 1-6). | : ra

“October 8th, 1954—A restraining order, issued by Ionor-

able Arcuir 0. Dawson in the Southern District of New:

York, was based upon affidavits of appraisers ‘‘as to the

value of the tug, Fastern Cities and her pending ‘freight”’

and a stipulation for value for the tug and freight, -in the

sum of $118,542. 21 (R. 10). It enjoined the prosecution of

all suits ‘‘against petitioner herein and/or against the tug’

Eastern Cities’’ (R. 11).

Nove mber Sth, 1954—This. respondent Appeared speci-

ally and filed exceptions to the petition on the ground that

‘the petitioner sought limitation and exoneration with re-.

‘spect to the barge LTC No. 38 hit failed to surrender that:

vessel ‘and, therefore, such -exe mption could not be claimed

in this proceeding. The application was for. an order .

sustaining the exceptions and for a final dec ree dismissing

the petition and a ‘the vaio order of October:

8th, 1954 (R. 12-21). | :

December. 16th, 1954—Honorable Syuvester J. Ryan

denied the motion but held that the petitioner’s failure to

4

' file an additional bond on behalf of the barge LTC No. 38

would require modification of the restraining order so that °

‘it would have effect only with respect’ to the tug Eastern

Cities .(not officially reported, R. 21-23).

February 10th, 1955—Petitioner filed a bond on behalf

_-of barge LTC No, 38 in the amount of $165,000 reciting the

value of the barge as.in that sum and that ‘‘the petitioner

herein, as owner of barge L7'C No. 38, hereby consents and

agrees that, if the claimants herein recover a decree may

be entered against it in amount not exceeding the above

stated amount’’ (1. e.) $165,000 (R. 24-26):

March Ist, 1955—Respondent filed her answer and her

claim in the amount of $250,000. There were’ also filed ten.

— other claims, accounting for all possible claimants in the

proceeding, of ‘a total.of $9,525, so that the sum total of all

_ original claims filed was $259,525 (R. 26, 27, 28, 33).

March 24th, 1955—Respondent moved before Honorable

. Edward Weinfeld for an order vacating the restraining

“order as to her state court action .claiming that upon the

filing of appropriate stipulations, in accordance with Peti-

tion of Texas Co., 213 F. 2d 479 (C. A. 2), the restraining

should be lifted since thé claims of $259,525 were in amount

less than the security posted on behalf of the tug.and barge,

"$283, 542.21 (R. 30-33). :

July 14th, 1955—Judge WEINFELD pene petitioner’ 3

argtiment that here there’ were two separate funds, one of

$148,542.21. for the tug and another of ‘$165,000 for the

barge (R. 43) and accordingly he denied the motion; how- .

ever,. without prejudiee to a further application by. re-

spondent in the.event appropriate stipulations were filed

bringing ‘all. claims against petitioner as to each vessel,

within the amount of the bond filed for each vessel, 132

TP. Supp. 504 (R. 42-46). . .

-August 10th, 1955—The order was entered upon the -

9)

Septémber 23rd, 1955—The ten claitiiants, other then

this respondent, filed stipulations agreeing not to increase

the amounts of their claims as made in the total sum of

$9,525, nor to enter judgments in excess of their amounts

and waiving any claim of res judicata with respect to the

question of limitation of either of the vessels (R. 47-50).

On the same day this respondent filed a stipulation

reducing her claim against. petitioner, as owner of the

Eastern Cities to $100,000, and as owner of the LTC No. 38°

to $150,000. She also agreed not to increase the amount

of either of said claims as to the petitioner or either of

its vessels, or to enter judgment in excess of the stipulated

amounts of her claims against petitioner as owner of either

of them, and she waived any claim of res judicata with

respect to the limitation issues involving either of the

vessels (R. 36).

October 4th, 1955—Respondeit again moved for a modi- »

‘fication of the restraining order of October 8th, 1954 so.

that she could proceed with her state court suit, basing

the motion upon Judge WEINFELD’s prior decision and order -

and the an soe cineal filed in full compliance therewith (R.

37-41). ‘ae

December 29th- 30th, 1955—Judge WernreL_p rendered

his decision, supplemented by a‘memorandum decision mak-

_ Ing ‘reference to. Matter of Trinidad Corp., décided De--

cember 28th, 1955, 229 F. 2d 423 (C. A. 2), and which, he

held, supported his disposition of this matter. He granted

respondent’s motion and, by the memorandum decision,

directed that further stipulations and. partial releases, sug-

- gested in the Trinidad case, be submitted by respondent

_ with the proposed order. 137 Fed. Supp. 311 (rnemoran-_

dum decision, R. 51).

January 16th, 1956—Judge WeInreLp signed the order’

modifying the restraining order of October 8th, 1954 with

respect to respondent’s state court suit, the respondent

having offered her sworn stipulation and partial “releases

6 =

required by the Court’s decision: The order granting the

motion was made subject to the following conditions:

1. that claimant shall be permitted to prosecute

her suit in Supreme Court, State of New York, Ulster |

County only to judgment ;

2. that-the injunction of October 8th, 1954, inso-

far as its enjoins collection of the judgment elsew here

that in this proceeding, shall be continued ;

3. that the Court expressly reserves jurisdiction

. te reestablish a concourse and to adjudic¢ate the peti-

tioner’s right, to a limitation in the event that the .

funds should ultimately prove to be inadequate ;

- that in no event shall this claimant recover

aoe the fund an amount in excess. of her claim as.

reduced by the partial releases heretofore given until

*. all other claims have been satisfied in full;

®. that the Court further retains jurisdiction’ of

this ‘proceeding against the event that petitioner’s

right to linit hability of either the tug Eastern Ciries

or barge L. T. C. No. "38 should be questioned in, any

other forum (R. 52,. 93). sie

‘Respondent’ ~ iealatiien and partial releases rad as

follows: ~~

“1, She ereiterates and affirms the terms of the

written’ stipulation, heretofore executed by her on-

September 6th, 1955, duly acknowledged: before a -

Notary Public of the State of New York, Dutchess

* County, and filed herein on September 23rd‘ 1955,

Ee “hice ' ro

(a) that her claim. as against the tug KasterN

Crruss, thé ad inierim stipulation for value filed

on its behalf, the petitioner and its stipulators for

value is. =e to the sum of $100,000 ;

(b) that her claim as against the barge L: T.C. .

No..38, the ad 4nterim supulation for value filed

on its behalf, the petitioner and :'/s stipulators for

‘value is } reduced to the sum of $10,000

(c) that she will not increase ‘the amount of

either of. said claims as against either of the. said

~ vessels, as above stated, or the petitioner and its

stipulators for value at any future date: beyond

the amounts so stated; .

(d) that she will. not enter judgment in any

Court. in excess of the stipulated amounts of her

claims against petitioner as owner of either of

said vessels ;* | .

(e) that she hereby waives any claim of res

judicata relevant to the i issue of limited hability

with respect to either of said vessels; based on a

judgment in any other. Court.

As her unconditional partial, release she repTe.

sents:

(a) that the total amount of all ae filed

herein as against the tug Eastern Cities and the |.

petitioner, as her owner, in $109,525; the total

amount of all claims filed herein as against the

barge: L. T. C. No. 38 and: the petitioner, as her

iain is $159, 929 5"

(b) that in consideration of the entry of an

order upon this stipulation, pursuant to the deci-

sions of Honorable Edward Weinfeld; United

States District Judge, dated December 29th and

30th, 1955, modifying the injunctive order en--.

tered herein October 8th, 1954, to permit the

‘prosecution of her suit in Supreme Court, State .

of New York, Ulster County, she hereby bpecenesaii

sors and assigns and the tug EASTERN pci pine”

_- the barge L. T.'C.-No. 38 unconditionally but .

partially to the extent hereinafter, described from

all causes of action whatsoever, in haw, in ad-

miralty, er in equity which against them she ever

had, now-has or which her successors hereafter

shall or ‘may. have ‘by reason of the. death of

Robert C. Henn on July 10th, 1954, resulting from

a collision between the motor vacht BLackstoxr,

on which he was a passenger, with the barge

¢g ; . ,

— ‘ . a

s

L. T. C. No. 38 in tow of the tug Eastern Cities, |

in the Hudson River; it being the intent and pur- |

pose of this release that it. be partial to the extent

of the difference between the amount of her claim .

originally filed herein in the sum of $250,000 and —

the reduced amount of her claim heretofore stipu- |

‘lated’ as against the tug Eastern Cities of ,.

$100,000, so that the amount hereby released as) _

to such tug and the petitioner is $150,000; and it

being the further intent and purpose of this-re-

‘lease that it be partial to the extent of the dif-

ference, between the amount of her claim orig-

inally filed herein in the sum of $250,000* and the

~ reduced amount of her claim heretofore gtipulated .

as against the barge L. T: C. No. 38 of $150,000, .

‘so that the amount hereby released as to such

barge and the-petitioner is $100,000.

3. She consents to, and hereby authorizes her

proctors Rosen & Rosen, to submit an order to thee

_ Court for entry and providing: | 2a e

(a) that she shall he permitted to prosecute

her suit in Supreme Court, State of New York,

Ulster County only to judgment ;

(b) that the injunction of October Sth, 1954:

insofar as it enjoins collection of the judgment’

elsewhere than in this proceeding, -shall be con-.

tinued ;.

(ce) that. the ee eg juris-

diction to reestablish a coneoursé and to adjudi-

cate the netitioner’s right to a: Hmitation in the

event that the funds’ should ultimately prove to

he inadequate ;

“(d) that in no eveht shall this adic re-

cover: from the fund an amount in excess of her

claim .as reduced by the partial yeleases Ahereto-

for e given until all other ¢ ‘aims hatve been satisfied

in full;

“(e) that the Court further retains jurisdiction

of thys proceeding against the event that. peti-

9

.

Eastern Cities or barge L. T. €. No. 38 should

be questioned in any other forum (R. 54).

April’13, 1956—The Court of Appeals. for the Second

Circuit affirmed the order of the District Court in an opin-

ion written by Judge Frank ‘and in which Chief Judge.

Ciark concurred. Judge Hincks dissented 232 F.2d 573

(R. 57). The Court modified the order below by a further

. limitation upon respondent’s measure of recovery (R. 62).

April 27, 1956—A petition for rehearing was filed by

the petitioner.

| June 7, 1956—Petitioner filed. a petition for a a hearing

en banc. |

August 21, 1956—The satition for rehearing en, banc |

was granted and upon the rehearing the Court adhered to

its original decision; without opinion, Chief Judge CLarK

and Judges Frank, Lumparp and Waterman being the

majority, and with Judges Hincxs and Mepis dissenting,

also without opinion 235 F. 2d 783. (R-82).

September 24, 1956—Petitioner filed its petition for>

¢ertiorari.

- November 19, 1956—The petition for Yertiorari was °

granted (R. 84). a

Summary of Argument -

Court over the limitation proceedings is uot. chal-

lenged, but rather has been conceded by ‘respondent

in her answer and by her formal stipulations (R. 29,

54, 36). It has been preserved completely by- the -

District Court’s order which modified the. restrain-

ing order permitting respondent to pursue her com-

mon law remeay: only to ——— in the state court

(R. D2, 93). .

B. The right to limit is in substance always a

plea in confession and avoidance, either partial or

total, according to the existence or absence of sal- —

vage and‘freight. For this reason the owner may

tioner’s right to limit liability of. either the tug

A. The admiralty jurisdiction of .the District ~

10:

ad plead it as a defense an when he proceeds_ by peti-

tion, he does not change his legal position: on the.

main issues.. Southern. Pacific v. U. S., 72 F.2d 212,

214 (C. A. 2). The fault of each of the vessels is to

be taken for granted on tlie question of limitation as

. that is really a defense of confession and avoidance.

Petition of U. S., 178 F. 2d 248, 252 (C. A.:2).

C. On a finding-of an adequate fund and appli-

cation having been seasonably made by a claimant

to. have the injunctive order modified, it is a proper

exercise of ,discrétion to. gratit leave to ,prosecute a

claim outside the concourse. It would cematitele an. °

‘abuse of discretion to deny stich an application, and.

thus deprive the claimant of her choice of forum. |

Petition of: Trinidad -Corp., 229 F. 2d 423, 428

(C. A. 2). To retain the cause in the District Court

would be to preserve the right‘of the ship owner,

_ but to destroy the right of the suitor in the state

-court to her common law remedy; to remit the cause.

to the state court for a limited purpose on the issues:

‘of negligence and damage would be to preserve the

rights of both parties. In the exercise of a sound .

discretion, the District Court followed that course,

gr anting respondent’s métion to modify the restrain-

ing order so as to permit the cause to proceed i in the

state court, getaining, as 4 matter of precaution, the.

petition for limitation of liability to be dealt with in .

the possible but unlikely event that the right-of peti-

tioner to a limited: liability might be brought into

-question in the state court, or the case otherwise

assume such form in that court as to bring it within

the exclusive power of a Court of Admiralty. The .

failure of the District Judge to do otherwise would ~

have constituted an abuse of iscretion subject to—

the correcting power of the appellate court below and

Sof this Court. ‘Langues v. Green, 282 U.S. 531, 541.

Because the statute is in derogation: of the common .- :

law and abridges the rights of a claimant to a full

"recovery of-fer damages, it is not to be construed

+o interfere with the rights of claimant to a greater

_ extent than is necessary to fully and adequately ef-

bd ~

ww

11

Ss

fectuate the purposes of the Act. Peiition poe et aes

ern Steamship Co., ie F. Supp. 316, .319 @D. C.

‘Del. ). :

D. The adequacy of: the funds having been ~

clearly found by the Lower Courts, ‘(1) the statu-

tory privilege of limiting liability is not in the nature

of .a forum non conveniens doctrine, and/42) the.

. statute gives the shipowner sued if the ‘stat court ~~

no advantage over other kinds of defendants in the

same position. Concourse is.to he granted only when

necessary in order to distribute an inadequate fund.

The purpose of limitation proceedings is to provide

a marshalling of assets—the distribution pro rata

' of an inadequate fund among claimants .none of

whom can. be paid in full. Petttion of -Teras Co...”

213 F. 2d 479, 482 (C. A. 2) Cert. denied 348 U.S.

829; Petition of Trinidad Cort 229 F. 2d 423, 427,

«428 (C. A. 2)¥ Curtis Bay’ Towing - v. Tug Kevin

-Moran Inc. ; 159 F. 2d 273, 276 (C. 2); Petition

of Moran Transportation Corp., 185. Fr 2d 386, 388,

fy

f

389 (C. A. 2); Petition of Red Star Barge Line, Inc.,

160 F..2d 436 (C. A. 2); The Aquitania, 14 F.2d

456, 458, affirmed 20 F. 2d 487 (C. A. 2).

E. Since the petitioner aa protected in the

limitation ‘of liability as to

sound reason ‘why respondent should not be per-

ch vessel, there.is no

mitted to proceed ‘with her action in the state’ ‘court |

—the. forum of her choice—the -Cou ving re-

tained jurisdiction of the limitation: procedling in

. the event the petitioner’s right to limit lability of

> each véssel should, be questioned, Petition of Lake

Tankers” Corp., 137 F. Supp. 311, 313 (R. 60).

F. The petitioner's argument that it is entitled

to a concursus, therefore, is specious, without foun-

_ dation in fact and is plainly designed for the ulterior

purpose of defeating respondent’s common, law

-remedy. It should receive no countenance in this

_ Court. Langnes v. Green, 282 U.S. 531, 543... -

‘G. The state court trial of the issues of riegli-

gence and damages will present no difficulty as theg

oe

o

the inconsistent contentions made by pet

this Court and below, | It has. premised its case imthe appli-

“eation for the writ of cettiorari and again in’ the opening

-argunients .of its appeal brief on*the statement that ‘‘the

12

do not touch the limitation: rights. of petitioner or

of ‘its interest value in, its vessels. Petitioner en-

dpatars by its arguments to ‘‘overinflate a relativ ely

simple proposition with! apparent, but unreal tech-

. hical problems. » Margland Cas. Co. v. Cushing, 347

ay Ss. 409, 428, | :

.e |

ARGUMENT

I. The- adequacy of the in in the limitation

proceeding: i is amply established. —

-The discussion of this factual: i issue 1s

aggregate of the sevéral claims exceeded the value of peti-

tioner’s. interest in its-vessels’’ petitigner’s. brief, page 10.

Strangely enough it then argues that neither this Court’s

Adiniralty’ Rules nor the Limitation St&utes require ‘that

the claims: e xceeed the fund hefore the Court.can take juris-

diction of the .proceeding (pp. 10, 11; petitioner’s brief).

This unusual ‘approach, i is finally explained ‘by Point 1H at

page ‘14, for there appears the real cause for the appea a1—

““Coneursus is not-contingent upon, the existence of ‘an.

‘inadequate fund"’, Then under Point IV; for safety’s sake,

‘it is stated that the claims erceed the fund and that, peti--

tionér is entitled tora concursus Ap. 27). As all this leads

to confusi on’ it is d®emed nec essary to “lay the ghost?’ as

to the adequate) v or inadequaéy of the fund once-and for all.

The Distrist Court found:

e . There are now two separate funds, one for the tug

and one for the barge. Each limitation fund Xs

&

necessitated by .

joner both in -

clearly in excess of ‘the claims asserted as against

each vessel.’’ Petition of Lake Tankers Corp., 137

F. Supp. 311, 313 (italics ours).

e

\T

is. A

The Court of Appeals found:

‘All of the claims against petitioner as the. tug’s

owner come to ‘$109,525, an amount Jess than the

bond of $118,542.21 as. to. petitioner's Jiability as

owner of that vessel; all of the claims against peti-

tioner as the barge’s owner come to $159,525, an

amount dess than the bond of $165,000 as to peti-

tioner’s liability as owner of that veégsel: Conse-

quently there was not an insufficient fund in respect

‘of petitioner’s liability either as owner of thé tug

Or@s owner of.the barge.”’ Petition of Lake Tankers ;

Corf232 F. 2d 573, 577 (italics ours).

The petitioner cannot complain of the treatnient of the —

case by both Lower Courts on a separate fund per vessel

basis because the Courts have simply adopted petitioner’ s

own earlier vibw of the niatter. When respondent . first

moved for a modification of the order restraining her.

pending State Court action on the ground that the addi-

tional bond belatedly posted for the barge in the sum. of

$165 ,000 then made a total fund of $283,542.21 against

claims of only $259,525, the petitioner strongly opposed

that view and argued that there were in fact two separate:

funds for the two vessels and, theréfore, the claims: exceederl

. each fund of $118,542. 21 and $165, O00 respectively. No-

where in, its brief does petitioner mention this cirenmstance

of argument below. Instead it. ‘makes ‘scant. referénce.,to .

the holding of Weryre.p, J.. ‘‘that there are two funds,

éach mere than the claims against it’? (p. 9, petitioner’s

ae brief) and complains that the Court of Appeals’ finding is

un precedented ** (p. 30)...

s

f

-This was not petitioner’ s contention én another day,

inn it suited its purpose of defeating’ the. respondent-.

_ widow’s right.to a’ jury trial in the state. fortim of her

choice, by claiming that. there were two funds:

“The petitioner senicads that Petition of Pins: Co.,

supra, ‘is inapplicable; that in fact the limitation

ia

Db

—

| D

14

funds'do not exceed the aggregate of all claims filed

- against it. Zt urges that ww the instant proceeding

there is not a single limitation. fund of $283,542.21

but on the contrary two separate funds, one for the

Eastern Cities in the sum of $148,542.21 and the.

other for the LTC No. 38 in the amount of $165,000

and that pending a final determination of liability .-

on the part of each vessel,-each fund must be-treated

separately and ‘so treated clearly the eleven claims

- exceed each fund and so must be brought. into -con-

course.”’ Petition of Lake Tankers Corp., 132 F:

Supp. 504, 505 (italies ours). | vg

Another misstatement under this subject in ee:

brief requires examination: ‘i |

In compliance with the condition of WEINFELD, J.’s

-order denying the first motion for modification, namely

>»

that she could renew her application ‘in the event appro-

priate stipulations are filed bringing the total claims * * *

within the amounts of the respective interim stipulations

* * * ‘on behalf of the, tug Kastern Cities and the barge

LTC No. 38’’, respondents reduced her wlaims -against peti-

_tioner'as tug owner to $100,000 and as*barge owner: to

6$150,000 (R. 35,.36).

Though it happened that the sum total of. ‘her reduced

“elaims was $250,000, she nevertheless ‘treduced’’ them hy

‘the clear language of the stipulation. If she had reduced

eithér claim.by $5,000 or $10, 000: more petitioner would not

have the mathematical weak reéd to work with in asserting

throughout fhé “litigation that respondent merely ‘‘allo-

_cated’” ‘or ‘‘apportioned”’ her claim and; therefore, the

" picture had not changed. Neither lower court vas sway ed

by that ne da The’ District Court wrote:

“*

- «Nonetheless the petitioner contends that the motion

to vacate the restraining must again be denied be-

cause the amount 6f the administratrix’s claim had. '

not been reduced— it has only been allocated as be-

tween the tug and ee and the eagregate of the .

*

claims remain as before. I-cannot agreé. The claim:

~ + ant has in fact reduéed her claim, as against each

vessels’? Lake Tankers-Corp., 137 F. Supp. 311, 313.

In its statement of the case the Court of Appeals dis-

regardéd the tentous assertion of *‘allocating’’ and stated

‘that “tappellee filed a stipulation reducing her claini™’

Petition of Lake Tankers Corp., 232 F. 2d 573, 575 (R.938)..

_ In its brief: in this ‘Court,. petitioner still'clings to the

same erroneous view ard repeatedly -spez ks of the respond-

ent’s-having ‘‘allégated”’ or ‘‘apportioned”’ her. claim. At:

page’ 7 it goes so far as to say of WrINFELD, .J.: ‘* How--

ever, in his opinion the Judge suggested that respondent

eould-escape the restraining order and the concursus of the

limitation proceeding if she would apportion her claim

‘against the tug and barge and bring the anjgunts of the

~ claims against each Vessel to a sum less than’ its value”

(ifwlies ours). This unfortunate language requires correc-:

tion in at. least two places. . . . - )

Likewise the elaborate table of claims at page 8 of pgti-

tioner’s brief is completely contrary to the findings of the

Lower Courts and to the truth of the matter. It was used

in the briefs below and disregarded and, we submit, it has

no place in this argument." : . |

Drawing support from any direction, the petitioner also

‘stresses the amounts of damages claimed’ originally in, the

State Court suits brought by this respondent and four

other claimants. The stipulations in the limitation pro-

» ceedings ‘unequivocally fix the amounts of all claims without

regard to the original State Court claims. Each claimant

has agreed not to increase the amount of his or her claim |

as fixed by the stipulations in the. limitation proceeding

CR. 36; 47-50, 54-56). Therefore, this ‘ ‘straw man’? is like

the others... cee : —

dt will be seen that though petitioner in its Summary

e

* The index pf the record is also incorrect in labelhag respondent's stipvia-

tion as one “allocating” her claim

.

. ‘

fi .

16

| = Afenment (p. 10) and. elsewhere. complains of the.

*maneuverings-’ of the . widow respondent to preserve |

her-common law right to a jury trial in the court where her

suit is pending, the petitioner itself has used every, possible

artifice and argument to defeat her. It was wrang at the

outset in failing to file proper security for. the barge, as

Judge Ryan early held (not. officially reported, R. 21),

because it knew, that it.was charged with negligence in the

. operation of the barge as’well as of the tug (R, 19). The

restraining order was granted erroneously for that reason

(R: 10): It was willing to contend that.there was a separate

si thereafter for each vessel—only for the purpose of

restraining the State Court proceeding. Having taken that

_ position it about faced in the Court:of Appeals and com-

plained of WEINFELD, J.’s holding .of two funds as if it

had nothing to do with it. It still urges against its original .

»tontention and the finding of both Lower Courts. It is

- still willing to advance the specious argument of “‘alloca-

tion’’ in spite of the findings below.

_ It is made perfectly plain that petitioner seeks only to

destroy a right 'to® which.respondent is clearly entitled,—

>to try in the forum of ler choice the cause for the negli-

gent death of her-husband and-the father of her three small

_ daughters. The foregoing review proves conclusively that

the ‘‘maneuverings’’ haye all been on the petitioner’s part,

and for an ulterior purpose. They should,receive no cotn-

tenance by this Court. soci dane v. Green, 282 U.S. 531.

fl. Ona Saline of an.adequate ae it is a erager |

exercise of discretion to grant leave to prosecute a

‘claim outside the concourse:

_ As this Court has yecoguiséd, the Southern District of

New York and the. Court of Appeals for the Second Cir-

euit have been the fountainheads of sound ‘admiralty. law

: a developing from the great volume: of business of*

“>

od

a.

this nature in those Courts. “Bisso, Jr. v. Inland Waterways

Corp., 349 OU, S. 85, 99, HOU.

Petitioner sharply complains of what it éalls a ‘‘rule’’

in this Circuit and which, it says, is Opposed.to a result

whieh it urges under Point [1], namely, that concursus is

not contingent upon the existence of an inddequate fund.

No decision of this or any other Court’ directly in point is

cited but rather bits of dictum’ are supplied to support .a

contention whick is wholly out of step ‘with conditigns in ©

the shipping and insurance industries in the year 1957.

Relying on the pritilege, accorded by a Statute more than

one-hundred years old, to limit its liability, it asks this

Court (8 disregard the principal object of the Statute and

to hold that its primary purpose-was to bring all‘ claims’

into concourse without regard to the limited liability feature.

It contends that in Maryland Casualty Co. v. Cushing, 347

‘ U. 8.490, 417 this determination was made and it also cites

_ Hartford Accident & Indemnity Co. v. Southern Pacific Co.,

273 U. S. 207, 357, 359 as supporting its position. These.

ts ‘guthoritien and other cases were urged before the Court of :

Appeals for the Second Circuit in Petition of Texas Co.,

213 F. 2d 478 (C. A. 2): Cert. denied 348 U. S: 829 and in

Petition of Trinidad Corp., 229 F. 2d 423 (C. A. 2)..

The Court of Appeals, in both of those cases rejected

the argument. —

In Petition of Texas Co. (supra 481), the Géurt w rete:

‘‘ Although the claims as originally filed exceedéd

the fund (or stipulated value) of $2, 109,957.58, they

have now. been reduced by stipulation so that the

fund is about $350,000 in excess of all-filed claims.

& a consequence, we do not have the problem of a:

istribution of an insufficient fund contemplated by

‘the staute. . For 46 U. S. G. A: § 184 provides that,

when loss is suffered by several persons, ‘and the .

whole value of the vessel, and her freight for the

vowage, is not sufficient to make compensation to

~ each of them, 7 shall receive compensation *:* *

-

_& r

ef mS a ae

“18

in proportion to their respective losses’, and that the :

limitation proceedings are ‘for the purpose of appor-

tioning the sum * * * among the parties entitled;

thereto (citing, authorities).

— We ‘have Several times announced the principles

which we.think must apply here: Absent an insuf- -

ficient fund (1) the statutory ‘privitege-of—imiting *

‘liability is not‘in the nature of a-forum. non con-

veniens doctrine, and (2) the statute gives a ship-_

owner, sued in several suits (ev en if in divers places)

by divers persons, no advantage over other kingls gf

defendants in the same position. Concourse is to be

granted ‘only when-* * * necessary in order to -

distribute an. inadequate fund’ (¢iting authorities). =

The. ‘purpose of limitation proceedings is not to

_ prevent a multiplicity of suits but, in an equitable

. fashion, to provide a marshalling of assets—the dis-

tribution pro rata of an inadequate fund among

claimants, none of whom catr be paid in full’ (citing )

authorities). We see nothing to the contrary in

Maryland, Casualty Co. v. Cushing, 347 U. S. 409,

748. Ct. Gos, where the claims aggregated $600, 000

and the: Court was advised the valuation was - -but

$25,000.”’

In Pulition of Trinidad Corp. (supra, 427) the Court:

made its position eyen more clear:

“The appellant, in. a powerful argument, has

asked us to re-examine the Teias Company holding. |

It asserts that in a limitation proceeding invol¥ing

multiple claims ‘the heart of this system is a con-

cursus of all claims to ensure the = and.

. economical disposition of controversies in» which

there are often a_ multitude of leuhents,? citing

Maruland Casualty Co. v. Cushing, 347 U. S. 409.

It stresses the pertinence of the. following passage’

from the opinion in Hartford Accident & Indemnity

Co. v. Southern Pactfic Co., 273 U.S. 207: aw

‘The proceeding partakes in a way of the

features of a bill to enjoin a multiplicity of suits,

@ bill in thé nature ‘of an interpleader, and a

5 a

7 eee

. 7 i

creditor’s bill: It looks to.a complete apal just

disposition of a many cornered controversy, and

is applicable to proceedings ‘in ‘rem against the

ship’ as -well as to proceedings ‘in personam -

against the owner, the limitation extending’ to the:

owner’s property as well as to his person.’’

ae Arid appellant further fites Butler v. Boston &

Savannah Steamship Co., 130 U.'S: 527; Providence

_€ N. Y.£8. S: Co. v. Hill Mfg. Co., 109 U.S. 578:

The ScoNand, 105 U. 8. 24, 33; ‘Ex parte Slayton,

105 U. 8.451, 452; and Just v. Chambers, 312 U.S.

’ 383, 385-6. It suggests that this court in déciding

the Texas Company case may have overlooked these

decisions* But in none of those decisions was there

a vonsideration of the question presently raised, ie.,-.

whether when the fund in court is adequate for pay-

ment in full of all the clainis, the courts should exer-

cise its-jurisdiction to effectuate and maintain a con-:

course,

It is, of course, true that: in limitation cases in.

which the sum total of the damages as liquidated _ ,

may exceed the fund available for the’ paymeut*of

claims, the concourse of all claimants in the limifa-

tion proceeding is a technique indispensable ‘to the

statutory objective, viz., a marshalling of-claims..

For-in such a case, each cldimant has an interest

not only to enhancé his own damages but also to-hold

t a minimum the damages allowed on competing

claims: the greater the damages proved for a com-

-peting. claim the less will be’ the proportionate share

of the fund actually payable to another claimant

under 46 U. S. C. A. 184. In that situation, it is a-

matter. of indifference to the owner how one claim-

ant fares, vis-a-vis another. This feature: explains

the description, in Hartford Accident & Indemnity _

Co. v. Southern Pacific .Co., supra,’ of such a pro-

_ ceeding as ‘a many cornered controversy.’ In such

cases, on the issues of the owner’s. liability and of

its right to a limitation, the claimants have a com-

mon interest based largely on the same facts: but

on the issue of their respective damages ‘their in-

90

terest are competing. .The concourse is the

statutory. technique for the detérmingtion of these

common and competing interests. In such: cases,

therefore, the coneourse will not be disturbed—not

even at the instance of the shipowner, as we held in

The Quarrington Court, 102 F. 2d 916.

___-,Hewever, in cases in which-the fund exceeds the:

total amount of damages which may be awarded, the

‘many cornered. controversy’ does not exist. On the

one hand, the owner’s right to a limitation becomes .

moot and, on the other hand, no occasion for a’

marshalling arises and the. concourse is ndét neces-

sary to protect one claimant from excessive claims

by competing claimants. In’ such cases, this court

has held that the limitation statute ¢arries.no- power

-to enforce a,concourse, thereby depriving claimants

of a choice of forum otherwise available. The

Acquitania, 14 F. 2d 456, aff’d 20 F. 2d 457; Curtis -

Bay Towing Co. v. Tug Kevi in Moran, Inc., 159 F. 2d

273; and Petition of Moran Transportation Corp.,

185 F. 2d 386. The holding of Petition of Texas

Company is no more than a logical development of

that doctrine :-it recognizes that, when application is

made to relax a concourse previously granted, the —

- court in the exercise of its discretionary powers must

make a preliminary determination of the adequacy of.’

* s the fund in court to pay in full all claims which may

be allowed. 3 ieee

Generally, for purposes of such a ipinrrluition

the maximum damages ‘originally sought on claims

“still pending will be. taken ay-th measure of an

adequate. fund: ‘the court will not look into the

merits of the claims but will assume that the full:

damages sought may ‘be awarded. But the Fexas

Company Petition rule recognizes that in the formu-

lation of its discretion the court should give appro-

priate consideration to releases of claims thereto-

fore filed and to the probability that additional claims

may yet be filed. Nevertheless, the same case re-

affirms our earlier holding that,-in cases in which

the fund is found adequate to-obviate the need for

marshalling, the limitation statute may not be taken

' c2 ae

) |, as a grant.of power, not otherwise existing in the

limitation court, to énjoin a multiplicity of actions.

It follows that neither the existence nor the possi-

bility of multiple actions growing: out of the maritime _

disaster which gave rise to the limitation proceeding

is relevant to a détermination of the adequacy of the -

fund. \ ae .

In line with our prior decisions we again hold that,

on a finding of an adequate fund made in the light

of all relevant factors, on an application seasonably

_ made it is a proper exercise of discretion to grant

leave to prosecute a claim outside the concourse and

that it would-constitute an abuse of discretion to deny ac

___-such an application and thus deprive the claimant of

his choice of forum.’’” Pe

It will be noted from both opinions of the Court of 7

Appeals in Petition of Texas Co. and Petition of Trinidad

Corp. (supra) that the numerous decisions cited by peti-

tioner for general law propositions were thoroughly re-

viewed. The statements under Point I of petitioner’s brief

that ngither the limitation statutes nor the rules require

that the claims exceed we fund overlook the fact that the-

- Statutes were designed long ago to enable a ship owner to

limit his liability to the value of his interest in the vessel.

oy

Title 46 U.S. C., Section 183 js sub-headed ‘‘ Amount of

liability?’ and provides that *‘thegliability *’* * shall not

exceed * * * the value of the petitioner’s interest in the °

‘vessel’’, Section 184 entitled ‘‘Appértionment of compen-

sation’? provides for the apportiening of the sum to which

the owner may be liable among the claimants. “whenever

* * * the whole value of the vessel, and her freight: for

the voyage, is not. sufficient to make compensation to each

of them’”’ (italics ours). Accordingly, “they shall receive

compensation from the owner of the vessel in proportion

to their respective losses’’. — es

The admiralty rules merely provide* the procedural

measures to be taken by an owner “who shall desir¢ to.“

claim the benefit of limitation of liability’? (Rule 51): He

\

is permitted in the proceeding to contest ie liability or

that of his vessel. Rule 53. °°

But nowhere in either the statutes or the rules is there.

any language justifying petitioner’s present contention that .

the limitation statute is prinNWily a concursus statute.’

Thus while petitioner states that neither the statute nor _

the rules require that the claims exceed the fund, its argu.

ment fails because conversely neither the statute nor the °

‘Tules provide, for a concursus, absent an ees fund.

Petition of Texas Co., 213 F..2d 478, 481 (C. A. 2).

_As the Court.of Appeals pointed aut in " Petition» of

T rinidad Corp., 229 F. 2d 423, 528 the many -cornered con-

trgversy arises only where there is an inadequate fund, re-_

quiring the marshalling of claims so that the competing

- claimants might, receive just shares of the fund, the. ship-

owner being indifferent to the result among them if. liability ;

and the right of limitation have baat

- eoncourse is the statutory technique for dividing the fund.

But where the fund exceeds the total amount of damages.

',there is no many -cornered controversy* to be settled among

the claimants for. the concourse is unnecessary to. protect

2 one claimant against the excessive claim of another. There- —

for ‘e, the limitation statute carries no power to enforce a.

concourse where. the. fund is adéquate, .and thereby.to |

deprive aXclaimant of a choice of forum otherwise available.

This Court: is familiar with its decision in Maryland .

Casualty Co. vx Cushing, 347 U. S. 409, upon which peti-

‘tiener so strongly relies in claiming that a concursus is the

_ primary purpose of the limitation statute. As the Court

of Appeals pointed out in Petition of Texas Co. (supraj

the claims in that case aggregated $600,000 and the ‘Court

was advised that the valuation was but $25,000. While it

is ‘true that Mr. Justice FrankrurTer spoke of the heart

of the ‘‘sgstem’’ (i.e. the admiralty rules) as a concursus |

of all claims, that language, we believe, is further. explained

at peer 417 where the Court wrote :.

a

—_.

determined:: The °

23...

“‘They (the admiralty rules) ensure that all claim-

ants, not. just a favored few, will come in on an

~ equal. footing to obtain a pro rata share of their

-. damages,”

At page 418 thé Court pointed out that the. claims

totalled $600,000, the policies in suit only $180,000 and that

it could asume that the, ‘salvaged ship finally would be

valued at $25,000. The whole point of that case was that

the Court realized that some claimants in direct action suits

under insurance policies .would exhaust the insurance fund

designed to support the’ limitation fund, and thereby other |

_¢laimants would be unjustly deprived of .their fair. pro-

| portionaté shares. |

Mr. Justice Ciark, -in the course of his opinion, said

. that the Act of-1851 was to encourage American shipping: |

‘*hy placing | a limitation upon the personal liability of the

ship owner’? where there was ho privity or knowledge.

Mr. Justice Buack, at page 423 of his dissenting: opinion,

stated: oe

“This Act relieves: shipowners from a large part:

of the liability rormally imposgd-on: eniploy ers for

torts of their employees."’ — ~

\ He pointed out that the ship owner could simply: turn

a fund equal to the value of his interest over to the Court

in a limitation proceeding and all claims against him would

then have to be satisfied from that fund, no matter how

large the claims or how small the -fund.

Thus, though petitioner contends so strenuously that

concursus is the dominating feature of the limitation statute,

the very title of the Act and its language as well as - of

the rules refutes. its argument. 3

‘This Court said in Langnes v. Green, 282 U.S. 531, 541:

‘‘The term ‘discretion’ denotes: the absence of a

hard and fast rule. The Styria, Scopinich Claimant

v. Morgan,.185 U.S. 1, 9, 22S. Ct. 731, 46 L. Ed. 1027.

4

When invoked as a guide to judicial action, it means .

a sound discretion, that is to say, a-discretion exer-

cised not arbitrarily or wilfully, but with regard to J

_+ what is right and equitable under the circumstances

nd the law, and directed by the réason gnd con-

science of the judge to a just result. In thefcase now

_-under teview, the problem. presented to the District

_“ Court by the motion. of respondent was quite simple.

Upon ‘the face of the record, the state court whose

-jurisdiction-already had attached, was competent to

afford relief to the petitioner. (the claimant in the

case). The difference in the effect of adopting one: .

or the other of the two alternatives presented to the

District Court was obvious. To retain the cause

would be to preserve the right of the shipowner, but

to destroy the right of the suitor in the state eourt

to a common law remedy; to remit the, cause to the

state’ court would be to’preserve the rights of both

+ ?p The mere statement of these diverse results .

is s nt to demonstrate the justice of the latter

course; and we do not doubt that, in the exercise

of a sound discretion, the District. Court,. following

that course, should havé granted respondent’s motion

to. inative the restraining order so as to permit the ©

cause to proceed in the state court, retaining, as a .-

matter_of precaution, the petition for a limitation of

liability to be dealt with in the. possible but (since

it must be assumed that respondent’s motion was

not-an idle gesture but was made with full apprecia-

tion of the state court’s entire lack of admiralty

jurisdiction) the unlikely “event that the right of |

petitioner to a limited liability might be brought

into question in the state court, or the case otherwise

assume such form in that court as to bring it within

the exclusive power of a court of admiralty. The’

failure to do this, in our opinion, constituted an abuse

of discretion subject to the correcting power of the

appellate court below and of this court.’’

‘

Petitioner seeks tq, distinguish between. a single claim |

case and'one where, though there is an adequate fund, there

are several claims. We submit'that the Court of Appeals

>) eee

correctly held in Petition of Texas Co., Petition of Trinidad

el orp. and in this case that.there is no peculiar reason for

the admiralty court to have unlimited jurisdiction, the fund

beirig adequate, to the prejudice of a cfaimant.. There is

the basic principlé, as this Court recognized in Langnes v.

Green (supra, 543) that the act which gives the Court its’

admiralty and maritime jurisdiction saves to: suitors in all

eases the right of the common law remedy where the ¢ common

_ law is competent to give it, and good faith requires that

| this _proviso shall have its full and fair effect.

' Petitioner states, in reciting the early history of limi-

tation proceedings that the statute should not be grudgingly 3

construed against it. However, there is the equally. forceful

principle, wholly in ling with this Court’s holding in Langnes.

v. Green, that since Mhe statute is in. derogation of the

common law and abridges the rights of a claimant to a

. full recovery of her damages, it is not to be construed to

interfere with the rights ofthe claimant ta:a greater extent

than is necessary tp fully and adequately effectuate the

. purpose: of the act. Petition of Southern. Steamship. Com-

pany, 132 F. Supp. 316, 319 (D. C. Del.).

flere, after having had the matter twice before him and | .

with complete knowledge of all thé circumstances, Wrin-_ .

FIELD, J. exercised his sound discretion and in a careful

opinion concluded :

“Since petitioner as shipowner i is fully protected in

the limitation of liability as to each vessel, there is

‘no sound reason why claimant should not be per-

mitted to proceed with her action in the State Court—

the forum of her choiec. Finally; the Court retains

jurisdiction of the limitation proceeding in the event

_ Corp., 137 F. Supp. 311, 313.

Summarizing, ‘the respondent has not challenged but - |

readily concedes the right of the ship owner to invoke the —

-~ Rye Sy

= ¢

e

——

the petitioner’s right to limit liability of each vessel . .

should be questioned.’’ Petition of Lake Tankers: |

26

limitation statute by the filing of its petition. It does. not -

question those authorities in whick, because the restraining

‘order was not attacked, the admiralty courts-have made a

| _eomplete disposition of causes with varying results both :

"to the ship owner and to claimants in those proceedings.

But respondent insists that -her common law right to a jury

trial in the, forum of her choice must receive the equal

protection of thé law as the right of the ship. owner to.

‘limit his liability to the value of. his ‘interest in the vessel

or vessels. “Respondent. strenuously opposes the argument

that cconcursus is the primary object of the limitation

‘ statute. Dictum from after-trial decisions, cited by the |

petitioner, are not persuasive in the consideration of this

' _- primary, important question whether respondent’s right to. |

the connnon law remedy, where there is an adequate fund,

‘ may be taken away from-her by the argument that the

shipping industry in 1957 deserves better treatment than

the railroads, airlines and other transportation concerns.

Petitioner seeks to turn back the clock to that:early day

_. when:American shipping needed encouragement, but it can-

not be overlooked, as the Court of Appeals pointed out in|

Petition of Texas Co., 213 F. (2d 479, 482 that absent an

insufficient fand, “the limitation statute | gives a ship owner -

no-advantage over other kinds of defendants, . sued in. .°

several suits and by divers persons in divers places.

+ In Mar yland- Cas Co. v. Cushing, 347 U.S. 409, Mr.

* Justice Biack in a dissenting. opinion in which Chief Justice |

Warren, Mr. Justice’ Doveias and }Mr. Justice Mrxton .

concurred, wrote at page 437: ~ |

io

“ Judicia! expansion of the Limited Liability Act at

this date seems especially. inappropfiate. Many of

the cengitions in the shipping industry which in-

duced the 1851 Congress to pass the Act no longer

prevail. And ‘later Congresses, when they wished to

aid shipping, provided subsidies paid out of the

- public treasury rather than subsidies paid by injured

persons.’

sas

20

_ . : * t ° oe ® .

We respectfully submit that this.is no time for judicial i

expansion. to the extent here claimed by petitioner,—that

in the case of an adequate fund, it is entitled to a concursus

~ of all claims though, as stated, the land and air transporta-

tion industries do not have that advantage. - . .

_ At page 31 of its brief the petitioner states that it had

an option to begin a single, or two proceedings and that

it exercised that option and began one. It fails to men-

tion its attempt to “get away’’ with filing one bond for -

only the tug. ‘It further says, “ That’ was the exercise of

-a clear ‘right under the statute and the rules and such

advantages is it may gain ace the exercise of its right

cannot justly be taken away. as —

Are there then adventeges to be prese ae justly to a

petitioner, to the detriment of a widow and three young,

children of aman who, it is charged; was lost to them hy

wrongful acts of the petitioner? Is this a sport of Jegal

tricks by which thd respondent’s contthon law re amedy may

_be wiped out at the sole ‘‘option”’ of. the petitioner? -

If petitioner succeeds in. such argument the Court. must’

hold that in any case where the limitation petition names

two or more vessels, whose personnel are separately charged

fault, no relief whatever can be afforded to save to

claimants-suitors their common law remedy. .The Court

- . would have to hold that it is powerless to lift the restraint

- though claims are separately asserted against separate ade.

quate funds, and that the “option” or power lies solely

with the petitioner by the manner in which it invokes the -

limitation statutes, either by one or tw6 proceedings. That

course would bé wholly opposed to this Court's holding in

- Langnes ‘v. Green. (supra), from which we have quoted at

some length at. page’ 23 of this brief...

As to the ‘‘advantages”’ which petitioner seeks to gain,

the Court of Appeals said, ‘‘The €wner cannot enlarge its

‘rights under the statute by the mere expedient of coupling

* Re

_?

the two. proceedings”. Petition of Lake gainers Corp.

232 F; 2d 573, 577. 3

There is no question that petitioner could have filed a

separate linitation proceeding for the barge after Judge |

RyAwn’s holding that’a bond had to be posted for that vessel.

In stich event respondent would have filed a claim in that

proceeding for $150,000 and another claim in the tug limi-

tation proceeding for $100,000. Each fund would have been

adequate and she, long ago, would have gotten permission

to try her common law aetion. }

It was petitioner who wrongly shaped ‘the proceedings

from the -beginning -by filing a bond only for the tug and,

ever since, it has" used all possible means to frustrate re-

spondent in her-legal remedy -in the common law court,

where her suit lies dormant against the time wher the last

efferts of petitioner ,will have been expended. We submit

that the long hard fight which-she has made against ‘a for- |

midable opponent. deserves a prompt and decisive disposi-

tion in her favor. }

; j - |

iil. The cenndinitiis of viel s state court

action would not violate the admiralty jurisdiction of

limitation but ‘would determine only issues of negli-~

‘gence and damage, subject always to petitioner’ s

limitation right i in admiralty.

oe a final maneuver apeinst: onan petitioner seeks

to ‘‘overinflate a relatively simple proposition with appar-

ent, but unreal, technical problems’’. Maryland Cas. Co.

ov. Cushing, 347 U.S: 409, 428. } aly

It asserts that by somé inanner the state.court .will inter-

— fere with the in rem liability of. the vessels, a subject con-

cededly within the jurisdiction of the aes court. In

this ‘effort respondent states, at page 34. Of its brief, that

‘The District Court thought that the Ulster County Jury

could ‘spell out the precise lability that may be imposed |

“ ee K

with respect to each vessel’ *, This is an erroneous presen-

tation of the District Court’s opinion. Within a few lines

either side of the quoted portion there is clear Janguage

proving that the court had reference not. to‘ ‘each vessel)

but to the negligent operation of each by its + personnel,

T he Court said: :

She’ will be e ntitled to the aggregate of her sepa rate,

. and reduced claims only if she succeeds in fastening

liability by reason of the negligent operation of both

the tug and the barge.”

€

¢

In speaking of the employment of a special verdict .in

the state court, upon appropriate snopes, the Court

said:

. a

‘“Thus.in the event, under a special verdict, there is

a finding of negligence in the operation of the tug

and not of the barge, the moving claimant’s recovery,

under her stipulation could not exceed the amount of

_her reduced elaim.’’

Purther on the Cou said: ot ee

‘and alternatively if liability were’ established

. solely because of the ‘negligent - operation of .the

barge, no recourse @uld be had as against the bond

= by: the tu&’’ (137 F. i va 312, S13).

It is clear, therefore, that it wa's ‘never ‘the District

Court’s intention to say that it would si i the province

of the state court jury to determine the 7% rem liability of

either vessel: Ai *

Petitioner had earlier cited cases in Hs brief, in aid of

this m rem liability feature (pp. 5, 28), where .a vessel |

without motive power in tow of a tug was exonerated from

fault in rem because there was no active: négligence on its

part. This is sound law, as originally enunciated, hy this

court in Lirerpool,-ete. Nav. Co. v. Brooklyn Eastern. Dis-

trict Terminal, 251 US. 48, the principle being that since

39

the ‘*dumb’’ vessel was not an "instrumentality involved -

in the wrong it-was not required to be. sur rendered 1 in limi- .

tyfion proceedings. .Here, however, the failure of proper

lighting on the barge is a fault directly chargeable to her

personnel, as-well.as to those on the tug. Asfalto, 45 F.

— 2d 857, 859 (D. CS. DLN. Y.). In the first deci ision written

in this-‘matter, Judge Ryan said: . :

‘“The collision here saeineed at night. Movant

claims that a contributing cause was improper light-

ing of. the barge. - The petition alleges that both

vessels were ag hibiting regulation navigation lights.

A factual issue has been presented for trial. If the

barge was. not equipped with proper ‘lights, as |

movant asserts, it cannot now be.said that she was

not an offending vessel merely because she was with-

out motive a er and under the oueen of the tug.”’

The Asfallo, 45 F. 24 857 (R. 2 22, not officially re-

ported). -

~

Rogpondent does: not contest the tv rem liability of peti-

stlo.er’s vessels by” lier state court proceeding, She readily

agrees with the law propositions, at page 33 of its brief,

that the admiralty’ court has exclusive jurisdiction of all

questions affecting limitation- and that the amount of the

fund ds exelusively for the admiralty court to administer.

We submit that ‘the petitioner’s suppositious problems

with respect to the mechanies of handling this simple liti-

gation unduly exaggerate the picture, especially since at

this early stage we know that tle fault of those in charge

oféach vessel, for the monent, is to be taken for granted

on the question of limitation as that is really a defense of

confession and avoidance. Southern Pacific. Co. v. CE aug <.

72 F. 2d ee 214 (C. A. 2); oe “ U. S., 178 F. ‘3d.

243, 252°(C. A. 2). |

— is no doubt that eventually petitioner may he

held only for negligence of -those in charge of one of its

vessels and that the value of that particular vessel need -

ae a 31

i

only. be surrendered ultimately i in admiralty when the ajipr o-

priate ‘limited judgment shall have been: obtained by re-

.spondent, though not collected, in the state coprt.. This

would be the cas® even though the cause were tried in

admiralty. However, ‘neither this court nor the courts

‘ below‘are now called upon to. fathom future: questions of

ultimate liability, either with respect to the navigation af

the tug or the alleged’ improper lighting of thé barge.

Whether petitioner is infact liable for the negligence of

those in charge of either of its vessels, or both of them,

and the quantum of such liability all are questions not yet

ripe for consideration or until there is‘a trial-in the state.

court and further proceedings on the petition to:limit.

-“As' pointed out by Wrinretp, J. a special verdict aay

he applied for which would spell out the precise liability

with respect to each vessel and it is not to be presumed:

that the state court will deny ah pg applic: ition

for a special verdict. 137 F. a 311, 313 (New York

Civil Practice Act, Sees. 4 458, 459). oo sections make

"clear provisidir for pied to the jury for a’ special

verdict by ‘questions and findings in writing, and which

must be filed: with the clerk and entered in the “minutes,

upon which the judgment i is issued. The New ‘York official

reporters are replete with cases where those sections have

heen employed successfully and, in fact, the+ Appellate

‘Courts have encouraged the practice for the very purpose

of avoiding difficulty and lightening their work.

This case is a prime example of one where the special

- verdict would be-of particular value and therefore; with °

all due respect to Judge Hixcks, who dissented from the

rns ajority opinion in the-Court of Appeals, we cannot: agree

with his view that.‘‘Jt is by no means unlikely that the-

‘Judge would: refuse a request to. require special findings at

The speciai verdict would entail but three questions

which may be briefly stated: (1) Was defendant’s personnel _

\

_ 32

2

in charge of its tug negligent ‘to plaintiff's damage?” (2)

Was defendant’ s personnel i in charge of its barge negligent

to plaintiff's damage? (3) The amount of damages sus-

tained by plaintiff. The mechanics ‘for the collection of her

reduced cliims thereafter would rest solely’ within the :

province’ of the admiralty court in the limitation pro-:

ceeding. F

The ‘“spfeeuardé”” already provided for, in accordance

with Petttion of Trinidad Corp. and Petition of Texas Co.

(supra), were further strengthened in petitioner’s s favor by

the Court of Appeals in this ease. In affirming the deci- | |

' sion below it imposed the additional conditions that a

permanent injunction will issue enjoining respondent from.

collecting the excess. of $100,000 unless the judgment rests

on a special verdict allocating the amount as between peti-

tioner, as owner of the tug and the barge. If the judgment

exceeds $100,000 and, the jury finds petitioner liable solely:

as tug owner, she is enjoined from collecting any such

excess, and if liable solely as barge owner, she is erjoined:

_ from collecting any amount in excess of $150,000 (Petition

of Lake Tankers Corp., 232 F. 2d 573, 577): :

It will also be remembered that ‘she i is bound- completely

by her stipulations and partial releases, as well as by the

previous court ordér to de no more than to proceed to

judgment in the state court. She may not collect that judg-

ment elsewhere than in the limitation proceeding and the

court expressly reserves jurisdiction to reestablish a con-

_ course and adjudicate. petitioner’s right of limitation in the’

' event the funds should prove to be inadequate or the peti-

tioner’s right to limit is questioned in the state forum

(R. 5-9, 62).

The three situations, posed as ebtitional ‘obstacles by

petitioner at pages 35 and 36 of its brief may be readily

answered. Certainly neither the respondent nor her coun- -

sel would dare, to execute on the state court judgment

»

33

against’ petitioner’s bank accounts. since thely ar now

clearly enjoined by court order, issued on formal Sworn

stipulations. Further, in no event could petitioner be

called upon to pay respondent $118,000 if the tug per-

sonnel are found negligent since she has reduced her claim

to $100,000 against petitioner as tug owner. Finally, the

suggestion that the: admiralty court might some day enter —

a decree of exoneration with a perpetual injunction against

_ all claims, including respondent's, is too far fetched for

‘serious discussion, The District Court undoubtedly would

take cognizance of'its own orders previously entered and

would, at the proper time, issue a final decree Raper

of respondent’s claim and all others. .

Since the funds.are adequate, justifying the modification

- of the restraining order, and petitioner does not have an ~

advantage over other kinds of defendants sued in several

suits in divers places by divers. persons, why. should it be

in a different position than a railroad or airline con-

fronted with negligence suits of injured persons in several

forums? In such litigations the results might well be dif- .

ferent both as to liability and damages. AS concursus is

not the petitioner’s right under the circumstances of this

case, the results with respect to liability in the state court

or the admiralty court merely parallel those which other |

transportation .industries must face, except that they do.

not enjoy the valuable privilege of limiting their liability. .

There is no question of the decisions in the state court

being res. judicata here. Petition of Lake Tankers Corp.,

232 F. 2d 573, 577.

Accordingly, it is submitted that ae. s right to.a

jury trial in the forum of her choice is of paramount

importance and should be effectuated since all ‘‘safe-

guards’’ possible have been afforded petitioner in its right

of limitation. |

34

CONCLUSION |

P

é

For the reasons stated it is reepatllly submitted

- that the jatqnaenn of the court below should be

affirmed.

Dated-New York; N. ¥., April 26th, i.

f : Frank C. Mason,

: 25 Broadway,

o. | ‘New York 4, N. Y.,

Counsel for Respondent.

Pauw Rosen,

oe LEVan Haver, .

Of ‘Counsel.