# Petition for Writ of Certiorari — Waterman Steamship Corp. v. Dugan & McNamara, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386409_0299%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1960 - **Citation:** 364 U.S. 421 ## Text vewoe ILE COPY | : = Siro RTE EE LE EE — 0 Ns hha eel a: iP Be tr Aandi ae Y ° - 4 . ‘ . e S . < Chief Sales Biggs, iiacadee vase that on the eVvi- denee the jury ‘‘would have been entitled to find, as éon- tended’ by Waterman, that the ‘direct, proximate,. active and substantial cause of the, accident’ was the negligence of.the stevedoring company,’’ and that ‘indemnity for fhe shipowner need not necessarily be based on an express con- tract between the shipowner and the stevedoring company.”’ Thereafter, this Court reversed the. Third Cireuit in Crumady v. The Joachim. Hendrik Fisser v. Nacirema Operating Co., Inc., supra. The Court of Appeals then set guide the judgment herein, withdrew the first opinion upon petitioner’s motion for rehearing, and heard reargument before the court en banc to consider the effect of the Crumady, decision upon the present appeal (Appendix 9a). On November 17, 1959, the C ourt of Appeals decided, * with.the Chief Judge and two other members of the court dissenting, that-the Crumady deeision did not alter the requirement of contractual privity between the shipowner and the stevedore. | 6 Petition for A Writ of Certiorart “ Me REASONS RELIED ON FOR ALLOWANCE OFTHE WEIT. I. The Decision Conflicts With the Applicable Decisions of This Court. The decision of the Third -Cireuit in ‘this case. directly conflicts with the- decision of this Court in the’ Crumady. . ease, which held that the shipowner was entitled to in- demnity against a stevedoring company without privity of contract. In Crumady, as here, the services of the stevedoring - company had been contracted for by someone other than the shipowner. This Court found that thé shipowner was en- titled to indemnity, stating’ as follows (358 U. S. at 428- 429): -° — ‘‘A majority of the Court ruled in Ryan ( Co. v. Pan-Atlantic Corp., 350 U. S. 124, that where a shlp- owner and stevedoring company-entered into a service agreement, the former was entitled to indemnification . for all damages it sustained as a result of the stevedor- ing company’ s breach of its warranty of workmanlike service. And see Weyerhaeuser S! S. Co. v. Nactrema Co., 355 U. S. 563. * * * ‘‘We think this case is guverned by the principle announced in the Ryan case. The warranty which a stevedore owes when he goes aboard a vessel to per- form services: is plainly for the benefit of the vessel ‘whether the vessel’s owners are parties to the contract ornot. That is enough to bring the vessel into the zone _ of modern law that recognizes rights in‘ third-party beneficiaries. Restatement, Law of Contracts, Sec. 133. Moreover, as we said in the Ryan case, ‘com- petency and safety of stowage are inescapable elements. of the service undertaken.’ 350 U. S., at 133. They 4 ° Petition for A Writ of Certiorari 7 are part of the igteveinee’ s ‘warranty of workinanlike _ service that is comparable to a manufacturer’s war- ranty of the soundness of its manufactured product.’ Id., at 133-134.. See MacPherson v. Buick Motor Co., 217 N. Y. 382, 111 N. E. 1050. ‘‘We conclude that since ‘the isilliaaii of the stevedores, which brought the unseaworthiness of the vessel into play, amounted to a breach of the warranty of workmanlike. service, the vessel. may recover over.” ( Emphasis supplied. ) - The Third Circuit attempts to restrict the holding of this Court in the Crumady case to contracts between the stevedore and the operator of the vessel. The court below stated (Appendix 14a): dns “Thus, the actual holding of the Crumady case seems to be that a contractual undertaking of the steve- dore with the operator of a ship, ‘who is not the owner, to unload in a safe and workmanlike manner inures to the ship. In contrast the case now before us affords no basis for finding or assuming that the operator of the ship had any dealing whatever with the stevedoring company which discharged the cargo. To the contrary, as already pointed out, the District Court indicated and counsel have represented that the carriage was on such. terms and conditions that the consignee was respon- sible for the discharge of its own goods and arranged with the stevedoring company for the performance of . ‘that job. The shipowner and the stevedoring company . were strangers. It necessarily follows that the alleged — duty upon which the present claim rests can only be an ’ imposition on a wrongdoer in invitum. It is a question of tort liability, rather than one of contract or war- ranty, whether either wrongdoer must share the burden of a recovery-by the injured party against the other wrongdoer. In reality we have here a problem of con- . ih br 8 Petition for A Writ of Certiorari ‘tribution betwen tortfeasors and not one of indemnifica- tion for breach of warranty.’’ - This misconception of the reasoning in the Crumady decision disregards the position of the shipowner as third- party beneficiary.._ Nothing in the language used by this a Court suggests an intention to limit the third-party bene- ficiary principle to contracts by stevedoring companies with ship operators. The Ryan case stressed the obligation of the stevedore to. perform the contract in a workmanlike manner, allowing indemnity to the shipowner for breach of the stevedore’s warranty of workmanlike service. In Crumady, the Court applied the analogy of the manufac- turer’s warranty to the stevedore’s obligation, without - | regard to privity of contract. The Third Circuit in declin- ing to acknowledge that the privity doctrine has been re- jected has misapplied the Crumady decision. by attempting to limit its scope. Nor may the two cases ee distinguished on the ground - that the action in Crumady was against the vessel in rem, » since the shipowner, whether he is sued in personam or defends as claimant of the vessel in a suit in rem, sustains like damages in either case as the result of the stevedoring company’s breach of warranty. The Third Circuit erred in concluding that the ship- owner and the stevedoring company in this case were ‘‘strangers’’ and that petitioner is, in effect, a joint tort- feasor barred from recovery of contribution. Rather than representing a ‘‘prohibited misuse of the concept of in- demnity to obtain contribution” as found by the court be- low, this case is ences in principle with the Crumady case. The concept of a shipowner as ‘‘stranger’’ to the stevedore who discharges the cargo from his vessel, requir- _ ing the stevedore to make use of the ship’s equipment and - generally perform one of the traditional duties of the crew, cannot be accepted. Although the stevedore may not con- YQ Petition for A Writ of .Certiorari 9 tract directly with the shipowner, he does not come aboard _ the vessel as a trespasser. Someone having a direct inter- _ est in the business of the vessel has contracted for the stevedoring services, and whether the contract was made by the shipowner, the ship’s operator, or the consignee of | the cargo, the work of the stevedore is ultimately for the benefit of both the shipowner and himself. He comes aboard with the same authority to carry out the work as though the shipowner had directly contracted for the work and requested him to perform the services in a safe, proper and workmanlike manner. ? The present decision accordingly conflicts with the deci- sion of this Court. in the ) Coneeny case, and should be reversed. .’ II. The Decision Has. Decided an Important “Question of Federal Law Which Should Be Decided by This Court. The shipowner’s absolute and non-delegable duty -to ; furnish a seaworthy vessel and equipment imposes a unique and burdensome form of liability without fault. The ship- owner, or the vessel in rem, are liable not only for furnish- — ing unseaworthy gear to workmen, but may become liable for injuries to shore workmen caused by defective equip- _ ment brought aboard by their own employer, ‘Alaska. Steam- ship Co. v. Petterson,-347 U. S. 396 (1954), and for misuse of seaworthy equipment by longshoremen, Grillea v. United ' States, 232 F. 2d 919 (C. A. 2, 1956). As-the orbit of lia- bility increases, there is a corresponding increase of in- stances where the absolute liability of the vessel or ship- owner for injuries caused by unseaworthiness is due en- tirely to the fault or acts of others. . . The position of the shipowner is exceptional from the standpoint of his lack of actual control over the circum- Stances which create his liability. Merchant vessels are ‘commonly placed by charter under the control of others than the shipowner, and charterers often transfer control 10 Petition for A Writ of Certiorari and management of their ships to one or more sub- charterers. Foreign owners may have no direct contact with the physica] operation of their ships in American ports for months at a Time. Such special relationship of the shipowner to his vessel often places him at an extreme disadvantage i in dealing with claims of injury to shore workers arising from unseaworthi- ness, particularly when such claims are due to the sub- standard performance of shore contractors whom the ship- owner did not employ, and with whom he had no contractual privity. To deny indemnity in these situations is unjust and unreasonable. The shipowner is fairly entitled to in- demnity by virtue of his peculiar position under his war- ranty of seaworthiness which imposes liability without fault. If the decision of the court below is-to stand, two iden- ‘ tical ships at adjacent piers, employing the services of the _ same stevedore for loading or discharging the same type of | - cargo, sued by longshoremen for injuries resulting from _- identical conduct constituting breach of the stevedore’s warranty of workmanlike service, would -be allowed or denied indemnity solely upon the question of privity of - contract. ‘If the shipowner or operator of one ship had engaged the services of the ‘stevedore, indemnity would be allowed. If the consignee of the cargo on the other ship had engaged the services, indemnity would be denied. This result is neither just nor realistic, and the decision in n the es case does not support it. . . > Until this Court reversed the. Third Circuit in the . Ciumady case, it was the unquestioned law in this circuit that shipowners could not obtain indemnity from shore con- tractors under any circumstances of loss without direct ~ contractual privity with the party at fault. The language of the Crumady decision seems clearly intended to extend indemnity rights to shipowners without privity of contract, on the ground that they were within the ‘‘zone of law that recognizes rights in a beneficiaries."’ 358 U. S.: Petition for A Writ of Certiorari 11 _at 584. The present decision, reached during the same year, creates confusion and doubt regarding the intended menpe. of the principk of the Crumady case. The question here presented is a matter of ‘atten importance. in the active field of maritime litigation, and should be settled by this Court. CONCLUSION. A writ of certiorari should be granted in accordance with the prayer of this petition. Respectfully ae: Tuomas F. Movunxt, | Harrison G. Kiipare, J. Weties Henperson, Counsel for Petitioner. Dated: Philadelphia, Pennsylvania February 4, 1960 i . APPENDIX. — UNITED STATES COURT OF APPEALS For THE Tame Circuit No. 12,537 © . JASPER KING © . Sales ) = WATERMAN STEAMSHIP CORPORATION, DereNDANT AND Tuirp-Party PLAINTIFF, a ““ ; DUGAN & McNAMARA,. chi Tass P seve Derenpant, } Appellee. AppeaL From THE Unrtep States Districr Court For THE Eastern District oF PENNSYLVANIA — Argued June 10, 1958 _ Reargued December 1, 1958 Before: Biaas, Chief Judge; Maris, Goopricn, McLAUGHLIN, _ Katopner, Stavey and Hastie, Circuit Judges. OPINION OF .THE COURT (Filed January 16, 1959) Per Curmm: This is an appeal by a sisi plaintiff, defendant to the original negligence claim, from a decision that as a matter of law it is not entitled to be indemnified by the ap- ~ pellee, against which it has made- the present third-party claim. F (1a) —_ ‘ 2a Opinion (1/16/59) It is admitted that appellant, a shipowner, has paid damages to the original plaintiff, a stevedore, for shipboard injuries caused in part by the improper stowage of cargo. — Appellant concedes its absolute liability to the injured | stevedore. for the hartful consequences of this unseaworthy condition. However, appellant claims indemnity from the appellee, the stevedoring company which employed the in- jared man, o1. the theory that primary responsibility for the accident and an obligation ‘to indemnify the shipowner should be imposed on the appellee because the immediate cause of the accident was appellee’s negligence in unload- ‘ing the cargo, improper though the stowage admittedly was. How this case might have stood had the shipowner employed the steveduring- company to unload the cargo’ in question we need not and do not decide. For appellant neither alleged in‘its third-party complaint nor sought to prove any contractual relation between shipowner and’ ‘stevedoring company. Rather, as an affirmative defense, «ppellee in its answer asserted that there was no contract between these parties. The correctness of this allegation was stipulated at trial. Thus, whatever arrangement was made for unloading the cargo,' the shipowner ‘was not party to it and claims no benefit under it. x . ‘The District Court ruled that in such a situation as this the abserce of a contractual relation between the parties is fatal to the indemnity claim Any obligation of a stevedor- ing company to indemnify a ‘ship for shipboard injury of its employees in. the cotrse of their employment must be. ‘bottomed on agreement between the parties, express or im- 1. It was stated to us in argument and mentioned by the court below in directing a verdict against the third-party claim that the stevedoring company had been employed by the owner of the cargo td =~ unload it. But no evidence was introduced concerning this matter and counsel for the appellant stated to the court below that the particular contractual arrangement under which the unloading was performed was not material to the third-party claim. Opinion (1/16/59) 3a plied in fact. We have so stated in Brown v. American- | Hawaiian 8.8. Co., 3d Cir, 1954, 211 F.2d 16, 18 and Craw- 2 ford v. Pope & Talbot, Inc., 3d Cir. 1953, 206 F.2d 784, 793. . We adhere to that view of the matter. ; . | The judgment will be affirmed.. Bicas, Chief Judge, dissenting.- -_ TEA Deeming the evidence to be insufficient to support a _ juring the longshoreman was. unseaworthy, this court in *- . Crumady v. The Joachim Hendrik Fisser, 249 F.2d 818, 821 (1957), cert. granted 357 U.S. 903 (1958), stated that: | for that reason, ‘‘[W]e do not. reach the substantial ques- * _tion raised by the impleaded respondent [the stevedoring company] whether. there would have been-legal basis for making it an indemnitor, had the ship’s liability been sustained.’’ In Crumady:there was no express contract, written or oral; between the shipowner and the stevedoring company for the unloading of the vessel. 142 F.Supp. 389 (D.N.J. 1956)3 at p. 401. -In the instant case there was. no express contract, written or oral, for the unloading of the ship between the shipowner, Waterman, and the steve- doring company, Dugan and McNamara, Inc., the latter company having unloaded the vessel perhaps because of an “understanding”? with the shipowner, Waterman.’ ‘‘The 1. Apparently there was no express contract, oral or written, for the yey of the vessel. It should be noted, however, that para- graph 5 of and McNamara, Inc. was loyed to discharge the cargo “by virtue of authority from and an understanding entered into” by Dugan and eno Inc. with ap iy le “owner”, alleged to be Waterman. ' ~ /aterman’s answer to the- longshoreman’s erry paragraphs 2 and 3, admitted the allegations of paragraph 5 of the complaint with an immaterial qualification. The amended third-party complaint is silent as to any contract or “understanding” for the unloading of the vessel. The second defense of the amended answer to the third-party ry - 2 finding that the. ship’s cargo-loading gear which broke in- . | e injured jongshoreman’s complaint alleges that Dugan —. | 4a. Opinion (1/16/59) substantial question’’ referred to by this court in Crumady is before us in the imstant case. It is whether the shipowner . may recoup its loss against the stevedoring company if that company’s negligence caused the injury to.the long- shoreman, there being no express contract for the unload- ing of the ship entered into by the shipowner and the ateve- doring company. In so stating I'am not aumindtel of the _ of this court in Hagans v. Farrell Lines, 237 F.2d 477 (1956), that neither indemnity nor contribution can be recovered by the shipowner from the stevedoring company where the shipowner’s negligence has concurred with that of the stevedoring company in ‘causing the accident. As was stated in the dissenting opinion in Hagans, 237 F.2d at p. 483, the decision of this court in that ease unduly limited the scope of Ryan Stevedoring Co. v. Pan-Atlantic. S.S. Corp., 350 U.S. 124 (1956), and was in apparent conflict complaint denies that “there is any contract upon which indemnity may be founded”. A stipulation entire into by — and ‘icNamara, Inc. and counsel for Waterman, transcript p. in the form of és uestion and answer given at sidebar during the trial was as follows: nar for Dugan and McNamara, Inc. stated to counsel for Water- “I think you will concede there was no agreement, ‘written or ik between Lal shi Dugan and McNamara.” Counsel for Waterman repli tere wal ae contest tawein Dugee ont McNamara mo the Waterman Steamship Corporation, that .is cor- rect.” Counsel for Dugan and McNasr-—, Inc. then said, “Oral or . written.” ‘Counsel for Waterman repli ~ “I agree to that. That is right. - We concede that, though we of course deny its materiality under the case3.” The nature of the arra for the unloading ofthe vessel is far from plain on this but the pleading and statements of counsel may express the view that even though there was no contract, oral or written, there was nonetheless an “understanding” between Waterman and Dugan and McKenna, | Inc. that Dugan and Mc- Namara, Inc. would unload the vessel but that such an‘understanding could not s indemnity. For the reasons set out at a later point . in this opinion 1 think it is immaterial thet there.was no ‘express .* contract, written or ~~ , i Lipton SS ee ere Pe Te fF OS TE ee > ae. et 2 io eae ellen ie ent ep eo thee f ee, Be, GANT Oe Meee Me Opinion (1/16/59) Sa with American. President Lines v. Marine Terminal Corp., 234 F.2d 753 (9 Cir. 1956), cert. den. 352 U.S. 926 (1956).? I think, however, that the Hagans doctrine, even assum- . ing its soundness, is inapplicable ander the pleadings and. the evidence in the case at bar for the jury would have been entitled to find, as contended by Waterman, that the ‘‘direct,- proximate, active and substantial cause of the accident’’ was the negligence of the stevedoring company. I cannot conclude that the decision of the Supreme Court in Haleyon Lines v. Haenn Ship Corp.; 342 U.S. 282 (1952), would prevent recovery by the shipowner if the stevedor- ing company’s negligence was the direct, active, proximate and substantial tause of the longshoreman’s injury. ‘If the jury should so find, no principle of contribution neces- sarily would be involyed for the law would then require no division of damages between the shipowner and the stevedoring company. Indemnity arises from a contract, ‘express or implied, and enforces a duty on the wrongdoer to respond for damages. Thomas v. Malco Refineries, Inc., - 214 F.2d 884, 885 (10 Cir. 1954). See Brown v. American- Hawaiian 8.S. Co., 211 F.2d 16, 18 (3 Cir. 1954). Cf. the circumstances and the decision in Crawford v. Pope & Talbot, Inc., 206 F.2d 784, 793 (3 Cir. 153). I had thought that the independent right to indemnity was established in ‘this circuit by the decision in the case last cited: We - point out also that in Weyerhaeuser S.S. Co. v. Nacirema . Co., 355 U.S. 563, 569 (1958), the Supreme Court stated: ‘*[W]e believe séund judicial administration requires ‘us to point ont that in the area of contractual indemnity an _ 2. It should be noted that the case at bar was heard before the court en banc as was the Hagans case and for this reason the present ' writer believes that a dissent should be recorded not only in the instant _.¢ase but also to the fundamental principle inyolved in the majority opinion in and open for reconsideration ion here since a court en banc sat to adjudicate the instant case. As to possible rejection of this court’s view in yw by the Supreme Court, see the illuminat- ing > of Judge Hoffman in Ravel v. American Export Lines, 162 F. Supp , 288 (E.D. Va. 1958), le . 4 6a - - Opinion (1/16/59) application of the theories of ‘active’ or “passive” as well as ‘primary’ or ‘secondary’ negligence is inappropriate.’’, citing Ryan Stevedoring Co. v. Pan-Atlantic S.S. Co., supra. _ Last, indemnity for the shipowner need not necessarily be based on an express contract between the shipowner and the stevedoring company.- When a stevedoring company’ goes on a ship to unload it the stevedoring company repre- _ ‘sents in substance to the shipowner that the unloading will be done with reasonable caré and in a reasonably safe — * manner under the circumstances. The stevedoring com- ‘pany may be deemed to offer a unilateral contract to the shipowner saying in substance: ‘‘If you will permit me to - come upon your ship and unload it I will use reasonable care in the unloading.’’ The shipowner accepts | the offer by making its ship available. Such an arrangement or contract was in effect between the shipowner and the steve: | doring company in Hagans, creating what was described there as a ‘‘relational duty’’, 237 F.2d at p. 481. As was - statedgin the majority opinion in Brown v. American- Hawaiian S.S. Co., supra, 211 F.2d 16, n.4 cited to the text at p. 18: ‘‘It is difficult to conceive of a situation where there is no contract, either express or implied, between an employer whose men are aboard or about a vessel and the owner or charterer of such vessel.’’ I think it is impossible. _ Cf..Ryan Stevedoring Co. v. Pan-Atlantic 8.8. Corp., supra, - : 350 U.S. at pp. 132-135. Although the record does not reveal .how Dugan and _ McNamara, Inc. came on board the vessel, some person: must have engaged: that company for stevedoring. Even if we were to assume that the consignee, or consignor, or some disinterested stranger, had hired Dugan and Mc- ; Namara, Inc. to unload the cargo, @ relationship, con- tractual in nature, would have arisen whereby Dugan and McNamara, Inc. would have been obligated to indemnify Waterman for damages which Waterman had sustained by reason of Dugan and. McNamara, Inc.’s failure to un- . load the vessel as its duty requires. Under the assumed . 4 if * 4 x i, ee, te, See el "Opinion (1/16/59) | , 7a circumstances Waterman could be deemed to be a third- party beneficiary of the contract made by the consignee or the consignor with ee and McNamara, Ine. for the . unloading. Or if it be the fact, as it asserted, that there was no - express contract, written or oral, Dugan .and McNamara, Inc.’s obligation to indemnify Waterman could be held to be one of implied assumpsit.2 Certainly it should not be assumed that Dugan and McNamara, Inc. came upon the vessel by accident and accidentally unloaded it and there is evidence tending to prove that the longshoreman was injured because Dugan and McNamara, Inc. failed in its: duty. Clearly there were issyes here involved as to the re- spective liabilities of the parties, Waterman “d Dugan - and MeNamara, Inc.,. which should have gone to the jury with proper instructions. See again Weyerheuser S.S. Co. v. Nicirema Co., supra, 355 U.S. at p. 568. . For the\reasons stated I respectfully dissent. 3. At common law assumpsit was implied where an undertaking _ was presumed to have been made by a party from his conduct al- though he had made no express promise. If there was a breach of contract in the performance the performer was held liable, ex con- tractu. Moses v. Macferlan, 97 Eng. Rep. 678 (1760). See also Corpus Juris Secundum Vol. 42, Indemnity, Section 21, pp. 596-597 and the ee Saree t of Judge Goodrich in P. Dougherty Co. v. United States, 207 F.2d 626, 651 *(1953). citing Dean Ames, writing in 2 Harv. L. Rev. 1 on-““The History of Assumpsit”, set out on page 2. See also Revel v. American Export Lines, referted to in note 2, supra, 162 F. Supp. at pp. 286-287. 8a _ Order (3/10/59) UNITED STATES COURT OF APPEALS | For roe Tump Crecurr No. 12,537 - JASPER KING v. WATERMAN STEAMSHIP CORPORATION, ' Appellant, v. DUGAN & McNAMARA, INC. Present: Baas, Chief Judge, and Gooprica, McLavex.s, . Ka.opner, Statey and Hastre, Circuit Judges. - ORDER. Upon consideration of the motion filed by appellant on February 27; 1959 in the above-entitled case, It is Onperep that leave be, and it hereby is granted ap- pellant ta file a petition for rehearing out of time on or before March 26, 1956; It is further Orperep that the issuance of the mediate of this Court be stayed until further order of this Court. By THE COURT, Wuuum H. Haste Circuit Judge March 10, 1959 Nene ae eee re ats pce Saas alga ATO aime ot Bia ake (OMe ies bisa beta ne ea ee. ae % ie: Jay PIAP her WESSON SST oe eR EOD EO ey OTT OMe Cora Ne he: , ieee es a ENGR LI ALL VEE ARE TALL hE IRA ER AAG FAME GD 4S SOR OITA . s *% e Order (4/7/59) : . “9a UNITED STATES COURT OF APPEALS For THE Tub Circuir No. 12,537 JASPER KING WATERMAN STEAMSHIP CORPORATION, (Dert. anv 3p-Party Putr.), Appellant, . DUGAN & McNAMARA, Inc. (3p-Party Derr.) ee Present: Bicos, Chief Judge; and Maris, icine Mc- -LaucHun, Kavopner, STALey and. ‘Hastie, Circuit “— ORDER. Upon consideration of the petition for rehearing ‘and of the answer thereto, in thé above entitled case, | It is Orperep that the judgment of this Court entered January 16, 1959-be and it is hereby vacated and that the Per Curiam and dissenting opinion filed January 16, 1959 be and they are hereby withdrawn; It is Further Onperep that the parties may file supple- — ’ mental briefs as to the effect of the decision by the Supreme Court of the United States in Crumady, Petitioner v ‘‘Joachim Hendrik Fisser’’, etc. Petitioner v. Nacirema Operating Co., Inc., No. 62, October Term 1998, on apd is- _ sues in the above entitled case; April 7, 1959 - ‘10a _ Order (4/7/59) It is Further OrpERED that, decision is reserved as to whether and when oral.argument is to be had. . By THE COURT: | Wituum H. Hastie '. . Circuit Judge Dated: ¢y, - Opinion on Reargument (11/17/59) lla’ r UNITED STATES COURT OF APPEALS For THE Tuirp Circult . No. 12,537 JASPER KING a WATERMAN STEAMSHIP CORPORATION, . Defendant and Third-Party Plaintiff, Appellant : v. : DUGAN & McNAMARA, INC., , Third-Party Defendant, 7 ; | Appellee. AppeaL From THE UNITED States District CouRT FOR THE . Eastern District oF PENNSYLVANIA Argued June 10, 1958 Reargued December 1, 1958 —_oOo Reargued October 5, 1959 Before: Bicos, Chief Judge; Goovrich, McLaucHur, KaLopNER, STALEY, Hi vie and Forman, Circuit Judges. OPINION OF THE COURT _” (Filed November 17, 1959) By Hastie, Circutt Judge. ns This is an appeal by a third-party plainfftt from a decision that as a matter of law it is not entitled to be in- as) \ ps 122° Opinion on Reargument (11/17/59) demnified by the appellee, against which it has made the present third-party claim. The appeal, originally argued before a division of this court, has been reargued twice _ before the court en-bane. We ordered the second reargu- ment so that the parties might fully present their views concerning the force and effect of- the -decision of the Supreme Court in Crumady v. The Joachim H endrik Fisser, 358 U.S. 423, decided Februar¢ 24, 1959, after the first re. argument. This second reargument has also permitted Judge’Forman, who has joined us since the first reargu- — ment, to participate in the decision of a doubtful question of importance which has divided us. In the court below appellant shipowner, Waterman Steamship Co., was both defendant to the original maritime tort claim of.a stevedore for-shipboard injury and third- party plaintiff claiming indemnity from appellee, Dugan & McNamara, Inc., the stevedore’s employer. The- shipowner now appeals from a decision that it is not entitled to in- — demnity from the stevedoring contpany for an amount it has paid in satisfaction‘of the stevedore’s principal claim. In the present posture of the litigation it must be and is admitted that the stevedore’s injuries were caused in part, by improper stowage of cargo. Appellant concedes its absolute liability to the injured stevedore for the hurtful consequences of this unseaworthy condition. However, ap- pellant claims indemnity from the stevedoring company on the theory that primary responsibility for the accident and an obligation to indemnify the shipowner should be imposed on the appellee because the immediate cause of the accident _ was appellee’s negligence i in unloading the cargo, improper though the stowage admittedly was. How this case might have stood had the stevedoring company been employed by the owner or. operator of the ship to unload the cargo in question we need not and do not decide. For appellant neither alleged in its third-party complaint nor sought to prove any contractual relation or undertaking as the basis of the alleged liability. Rather, & Opinion on Reargument (11/17/59) ~ 13a as an affirmative defense, appellee in ite answer asserted that there was no contract between these parties. The cor- rectness of this allegation was stipulated at trial. What- ever arrangement was made for unloading the cargo,’ the shipowner was not party to it and on the present record claims no standing under it. rr The District Court ruled that in such a situation as this the absence of a contractual relation between the parties is fatal to the indemnity claim. We have said as much in Brown v. American-Hawatian S.S. Co., 3d Cir., 1954, 211 F.2d 16, 18 and Crawford v. Pope €. Talbot, Inc., 3d Cir., " 1953, 206 F.2d 784, 792. Any obligation of a stevedoring company to indemnify & shipowner for shipboard injury of its employees in the course of their employment must be bottomed on a promise, express or implied in‘fact, of the stevedoring company. - Otherwise, tort liability would be imposed upon the stevedoring company for negligent in- jury of its employee, a result, prohibited by the Longshore- men’s and Harbor Workers’ Act. However, it is strongly urged.that the Supreme Court in Crumady . The Joachim Hendrik Fisser, 358 U.S. 423, has rejected the reasoning and impaired the authority of the Brown and Crawford cases. That contention is our principal concern here. In the Crumady case the Supreme Court reviewed a decision of this court. We had not adjudicated the question of indemnity because it had been our view that there was no liability on the principal claim. However, the Supreme Court reversed us on the principal claim and then con- sidered and sustained the indemnity claim. Thus, in con- sidering what the Supreme Court said and did in the Crumady case we deal with an entirely familiar record. 1. It was stated to us in argument and mentioned by. the court below in directing a verdict against the third-party claim that the stevedoring company had been employed by the owner of the cargo to unload it. But no evidence was introduced concerning this matter and counsel for the appellant stated to the court below that the par- ticular contractual arrangement under which the unloading was per- formed was not material to-the third-party claim. l4a Opinion on Reargument (11/17/59) Crumady was a libel in rem against a vessel by a stevedore who had been injured in unloading cargo.. The ship impleaded the stevedoring company which had under- taken the unloading operation aud had employed the prin- cipal plaintiff. The evidence showed that-the shipowner - had chartered the vessel to an operator who had contracted with the stevedoring company to unload the vessel. In. these circumstances. the upreme Court ruled that ‘‘[t}he warranty [of workmanlike service] which a stevedore owes when he gocs.aboard a vessel to perform services is plainly for the benefit of the vessel whether the vessel’s owners are parties to the contract or not.’’ 358 U.S. at 428. The court — added: that the circumstances under consideration suffice *“*to bring the vessel into the zone of modern law that recognizes\rights in third-party beneficiaries’’. Ibid. Thus, the actual holding of the Crumady case seems to be that a fal undertaking of the stevedore with the operator workmanlike manner inures to the ship. In contrast the case now before us affords no basis for finding or assuming © that the operator of the ship had any dealing whatever with the stevedoring company which discharged the cargo. To the contrary, as already pointed out, the District Court indicated and, counsel have represented that the carriage was on such terms and conditions that the consignee was responsible for the discharge of its own goods and arranged with the stevedoring compahy for the performance of that . job. The shipowner and the stevedoring company were . strangers. It necessarily follows that the alleged duty upon which the present claim rests can only be an imposition on & wrongdoer in invitum. It is a question of tort liability, rather than one of contract or warranty, whether either wrongdoer must share the burden of a recovery by the in- jured party against the other wrongdoer. In reality we | have here a problem of contribution between tortfeasors * and not one of indemnification for breach of warranty. And the Supreme Court has clearly ruled that in these stevedore | hip, who is not the owner, to unload in a safe and | sei iedinea aiid alee aie ede ett ee Opinion on Reargument (11/17/59) l5a injury cases the shipowner may not require contribution from the stevedoring compaay. Jalcyon Lines v. Hdaenn Ship Ceiling and Refitting Corp., 1952, 342 U.S. 282. | - ‘We find no indication that the Supreme Court in the ~ Crumady case intended to abrogate or disregard the dis- tinction between a permitted reeovery-over based on con- tract and a prohibited misuse of the concept of indemnity to obtain contribution from a tortfeasor who enjoys the protection of the Longshoremen’s and Harbor ‘Workers’ Act. We cannot square a recovery in this case with adher- ence to that distinction. The judgment will be affirmed. Buses, Chief Judge, dissenting. The record shows that the accident to King, the long- *shoreman whose claim against Waterman Steamship Cor- poration, the third-party plaintiff-appellant, was reasonably . compromised by it, was caused by two factors. The ac- cident occurred, first, because of the improper stowage of — the cargo, bags of sugar, and second, because of the neg- ligence of Dugan & McNamara Company, Inc., the third- party, defendant, in unloading the cargo. It was stipulated - that there was ‘‘no agreement, written or oral, between the ship and. Dugan & McNamara’’. The decision of this court is based upon the absence of contractual privity between Waterman and Dugan & McNamara though it.appears to be conceded that if there were a contractual relation between them indemnity might be had by Waterman. See Ryan Stevedoring Co., Inc. v. Pan Atlantic Steamship Corp., 350 U.S. 124 (1956), and Weyerhaeuser Steamship Co, v. Nacirema Operating Co., Inc., 355 U.S. 563 (1958). > In the decision of the Supreme Court in Crumady v. The J. H. Fisser, 358 U.S. 423, 428-429 (1959), Mr. Justice Douglas stated: ‘‘We think this case is governed by the principle announced in the Ryan case. The warranty which a stevedore owes when he goes aboard a vessel to perform ‘9 oi. ** Opimion o On Reargument chad data services is plainly for the benefit of the cond whether the | vessel’s owners are-parties to the contract or not. That is — _ enough to bring the vessel into the zone of modern law that recognizes rights in third- -party beneficiaries. Restatement, Law of Contracts, § 133. Moreover, as we said in the Ryan case [cited supra], ‘competency and safety of stowage are inescapable elements of the service undertaken.’ 350 U.S. at 133. They are part of the stevedore’s ‘warranty of work- manlike service that is comparable to a manufacturer’s war- ranty of the soundness of its manufactured product.’ /d., at 133-134. See MacPherson v. Buick. Motor Co., 217 N.Y. _ 382, 111 N.E. 1050. ‘*We conclude that since the negligence of the. steve- dores, which brought the unseaworthiness of the vessel into play, amounted to a breach of the warranty of workmanlike service, the vessel may recover over:’’ I can perceive no merit to the distinction attempted to be made by the majority that the proceeding in Crumady was in rem against the vessel and that the evidence showed that the shipowner had chartered the vessel to an operator who had contracted with the stevedoring company to unload it. Crumady shows that Waterman by way of the third- party beneficiary contract, was entitled.to the warranty of workmanlike service that Dugan & McNamara, Inc. gave . when it undertook to unload the vessel. The judgment of the court below should be reversed. Judge Goodrich and Judge McLaughlin join in this dissent. Goopricu, Circuit Judge, Concurring in dissent. I agree with what Chief Judge Biggs has said in his dissent. I only want to add one idea. It seems to me that . with the elimination of the necessity of contract between shipowner and stevedore, as I think the Crumady case de- cjdes, we may have developing here a situation in which _ +. Opinion on Reargument (11/17/59) ' 7a rights of shipowner against stevedore may~be.analyzed as | growing out of a relationship between them not dependeyt — upon contract. The stevedore comes on the ship to perform labor and he comes with the permission of the shipowner: It seems to me out of this permission and the relation es- tablished thereby there can well be a duty. owed to the ship- owner not to create, by the acts of the stevedore, a situation which will cause loss to the shipowner. An analogy is to be.found in the duty of a person responsible for the conduct of another to be indemnified by the other for expense made . in discharge of such a responsibility. See Restatement, - Restrrution, §§ 96-99. if --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386409_0299%3A2. Public record. Not legal advice.