Brief for Respondents — Waterman Steamship Corp. v. Dugan & McNamara, Inc.

IN THE

Supreme Court of the United| Stateswwns own |

October Term 1960

No. 35

WATERMAN STEAMSHIP. CORPORATION, Petitioner

VU, |

DuGAN & MCNAMARA, INC., Respondent

BRIEF FOR RESPONDENT

J. PAUL ERWIN, JR.

@ _‘JoxN V. Lovitr

GEORGE FE. BEECHWOOD

2009 Walnut Street

Philadelphia 3, Pa. :

Counsel for Respondent

- BEECHWOOD & LoviTT aa

Of Counsel :

THE LEGAL INTELLIGENGER, 10 S. 37TH ST., PHILA. «

INDEX

| Page

Counter-Statement of Questions Presented for Review 1

‘Counter-Statement of the Case................... 4.

Summary of Argument Rp Pe ap fe ag de re SAR oy oe

Argument Pt ree ee Le sacle ce 8

QUESTION I. There is no right of «ntribution

between joint tort feasors in non-collision

maritime OD on eee ye ie aes ee 8

QUESTIONS II & III. The exclusionary effect of

the Longshoremen’s Act precludes recovery.

by shipowner against .stevedore employer of

longshoreman in tort cases, absent a contrac-

tual warranty or privity between shipowner

and stevedore, where the shipowner had no

’ responsibility for the discharge of cargo and

had no responsibility to pay directly or in-

directly any of the charges of the stevedore 13, 14

QUESTIONS IV & V. A shipowner may not claim

a right ‘as third-party benéficiary under a

stevedoring contract without proving the

terms and conditions of the contract and

the intention of the parties with respect

thereto eater ele te re ere «..17,21

QUESTION VI. A shipowner warrants his own:

proper stowage of cargo at the port of load-

ing and may not rely upon a stranger steve-

ddre at the: port of discharge to seek out,

discover and correct the shipowner’s faulty,

dangerous and unseaworthy stow, therefore

such shipowner may not recover indemnity .

for such stranger stevedore.......... oo ae

i

TABLE OF CITATIONS ~

. a ; :

Cases: a Page

Actieselskabet —_— Thorbjorn v. oo Co.,

260 F. a ee ee Rare peer cv ae

The BANES, 221 F. 27416 ...... Pony. oe 37

Brown v. American-Hawaiian Steamship Corporation

(3d Cir., 1954), 211 F.2d16...... Re are 15

Crawford v. Hope & Talbot (1953), 206 F. 2d'784. . 17

Crumady v. Joachim Hendrik Fisser (1959), 358 U.S.

- 423, 79S. Ct. 445, 3L.ed.2d413......... 8 et seq.

Dampskibs Aktieselskabet Thor v. Tropical Fruit Co.,

281 F. 740 «22s eee eee ees BT

Hagans v. Farrell Lines, ine. v. Lavino Shipping Com- ;

Me err eeer reese reese 24.

Halcyon Lines v. Haenn Ship Ceiling and Refitting

Corporation (1952), 342 U.S. 282, 72 S. Ct. 277,

4 ae eS rrr rere 8 et seq.

Isbrandsten Co., Inc. v. Local 1291 of International

Longshoremen’ s -Ass’n, 204 F. 2d 495°......... 34

THE LIZZIE D. SHAW, 95 F. 2d 65 ........... 21, 34

MacPherson v. Buick Motor Corporation, 217 N.Y. 382 27

THE NORTHERN No. 29. Flat-Top Fuel Co., Inc. v.

Be, BE Fs Ts OS co nce hes ciccecevews 37

Phosphate Mining Co. v. Unione Austriaca Navigazi-

one Gia’ Austro-Americana & Fratelli Cosulich

Societa Anonima, 3 F. 2d 239 ................ 37

Pope & Talbot v. Hawn (1953), 346 US. 406, 98 L. ed.

2 eS rrr rere rer rere 17

Robins Dry Dock & Repair Co. v. Flint, a, saathenes

Been i ears ena aierviay 36

TABLE OF CITATIONS—Continued ;

Cases: | Page

Ryan Stevedoring Co., Inc. v. Pan-Atlantic Steamship

Corporation (1956), 350 U.S. 124, 76 S. Ct. 232,

ee ee ee 11 et seq.

Weyerhaeuser S.S. Co: v. N acirema Operating Co., 355

U.S. 563, 2 L. ed. 2d 491, 78S. Ct. 488 .... 18 et seq:

Statute:

Longshoremen’s and Harbor Workers’ Compensation

Act, 44 Stat. 1426, 33 U.S.C.A., §905 43-14

Miscellaneous: -'_ ,

IN THE

SUPREME COURT OF THE UNITED STATES

October Term 1960

?

No. 35

WATERMAN STEAMSHIP CORPORATION, Petitioner

| v. , | .

DuGAN & MCNAMARA, INC., Respondent

RESPONDENT'S BRIEF

>

COUNTER-STATEMENT OF QUESTIONS

PRESENTED FOR REVIEW

I. Did the Supreme Court of the United States in its

decision ‘entitled Crumady v. Joachim Hendrik . Fisser

(1959), 358 U.S. 423, 79 S. Ct. 445, 3 L. Ed. 2d 413,

overrule its prior decision in Halcyon Lines:v. Haenn Ship

Ceiling and Refitting Corporation (1952), 342 U. S. 282,

72 S. Ct. 277, 96 L. Ed..318? —

Answered NO by the majority opinion of the United

States Court of Appeals for the Third Circuit. -

II. Did the Supreme Court of the United States in its

decision entitled Crumady v. Joachim Hendrik Fisser

(1959), 358°U. S. 423, 79 S. Ct. 445, 3 L. Ed. 413, strike .

down the force and effect, absent a contractual warranty,

1

2

"* of section 905 of the Longshoremen’s and Harbor Workers’

Compensation Act, 33 U. S. C. A., §901 et seq.? |

Answered NU by the majority opinion of the United

States Court of Appeals for the Third. Circuit.

III. Did the Supreme Court.of the United States in

its decision entitled Crumady v. Joachim Hendrik Fisser

(1959), 358 U. &. 423, 79 S. Ct. 445, 3 L. Ed. 413, reject,

overrule or impair the force and effect of the reasoning of

the United States Court of Appeals for the Third Circuit .

in Brown v. American-Hawaiian Steamship Company (3d

Cir., 1954), 211 F. 2d 16, and Crawford v. Pope & Talbot

(3d Cir., 1953), 206 F. 2d 784?

Answered NO by the majority opinion of the United

States Court of Appeals for the Third Circuit.

IV. If any or all of the answers. to the first three

questions is or are YES, then the question is

May a shipowner sued in a diversity civil actiori

recover indemnity from an independent stevedoring

contractor where neither the shipowner nor the ship

are responsible for. the discharge of the cargo at, the

port of discharge, are not responsible and do not pay

for such discharging, are both strangers to the con-.

- tract entered into by the stevedoring company, and

neither are in privity of contract, either express or

implied in fact? ie

Answered NO by the majority opinion of the United

_ States Court of Appeals for the Third Circuit.

___ V. How can any-court be expected to hold as a matter

of law that a-shipowner as a third party is beneficiary

under a contraet without having before it all the terms of

the contract whether written or oral, passes comprehension. .

. | VIL. Where admittedly the stowage of the‘cargo by the

ship was faulty and which fault admittedly rendered the

°

2

3

vessel unseaworthy [This is alleyed by the Petitioner in its.

own pleadings and was.offered in evidence], may the ship- —,

. owner recover indemnity from. the stevedoring concern

which went aboard the ship at and under the directions |

and orders of the cargo owners as consignee, and where

the consignee, as owner of the cargo, in its own behalf

' and for its own benefit, made an extensive written agree-

ment with the stevedoring company to discharge all of its

‘cargo and to pay for such discharge without designation

of any ship, vessel or owner and with the designation that

the stevedore would use especially proper equipment for

the consignee and use the pier under the control of the

cargo owner as consignee, and where the owner, as con-

signee, had full and complete responsibility for the dis-

charge of the cargo, and where the owner, as consignee,

had full and complete responsibility for the accruing of

demurrage, including lay time cause by strixes, -lockouts,

harbor congestion, bad weather, and where the cargo

owner, as consignee, assumed full and complete responsi-

bility for damage to the ship and damage to the cargo

while being discharged. .

Answered NO by the majority omion of the United

States Court of Appeals for the Third Circuit.

| 4 |

COUNTER-STATEMENT OF THE CASE

The original plaintiff, Jasper King, on June 11, 1954,

filed a complaint (R. 1) seeking recovery for injuries which

occurred on or about August 9, 1952 (R. 4). In February

of 1956, petitioner filed a third party complaint against

respondent (R. 1). In October of 1956, petitioner asked for

and was granted leave to file an amended third party com-

plaint (R. 2).

Jasper King, a longshoreman, sustained injuries when

a vertical column of sugar bags about: seven feet high col-

lapsed while he and his fellow employees were discharging

cargo abroad the SS. Afoundria while berthed in the Port

of Philadelphia, Pennsylvania, U.S. A.- The sugar bags had

been stowed in San Carlos, Negros Island, in the Philip-

_ pines, by a stevedore of the ship, unrelated and unconnected

in any way with the instant Respondent stevedore or owner

as consignee, about thirty-five days prior to the time the

original Plaintiff, Jasper King, was injured. The bags,

which contained raw sugar, were about three feet long and

eighteen to twenty-four inches wide. When laid flat they

were approximately fifteen inches thick. The bags were —

stowed parallel and: run athwartship.

In the original Complaint by Jasper King alleged

against the Petitioner, that his injuries were caused by

the unseaworthiness of the SS. Afoundria and the negli-

gence of her crew resulting from an unseaworthy or un-

stable stow which created an unsafe and hazardous place

in which to work. (R. 4) |

Specifically, Jasper King, a longshoreman, alleged. in

his pleading that Petitioner ey

“allowed and permitted said cargo of sugar to be

stowed in such a negligent and careless manner as

to constitute a danger to plaintiff and other workmen

. unloading said cargo” and “failing to warn the pl: in-

tiff and other workmen of the dangerous and defective

eee ee Pe ee ee ee

—_— -— -*

5

stowage of the cargo of sugar” and “permitting plain-

tiff and other workmen to commence unloading opera-

tions in a dangerous place of employment.” (R. 4)

The Petitioners Amendea Third Party Complaint al-

leged inter alia, ,

“While Jasper King and others were removing

‘bags from a location about six feet aft of the forward

bulkhead, one or more bags fell from the top of one.

tier and struck Jasper King, causing the various severe .

personal injuries mentioned in the complaint. The only

conditiun attributable to the vessel which could have .

been material in connection with this accident was the

placing or shifting of a bag at or near the bottom of

* the exposed tier in such a position that the bags above

it would not be firmly supported when reached by the

longshoremc., ‘which condition must have existed in

order to produce the aforesaid accident. . ..” (R.8, 9).

In paragraph 4 of the Petitioner’s Amended Third .

Party Complaint it is alleged:

“The unseaworthy condition of the stow which

was created by the shifting or improper placing of a -

bag at or near the bottom of the exposed portion of the

vertical tier from which the bag or bags fell involved

absolutely liability on the part of the Waterman

Steamship Corporation as defendant in the original

action brought against it by Jasper King as plain- —

: OM... ” (Kh 9)

The Respondent’s Answer to the Amended Third Party

Complaint averred that the

“manner and methods in which the bags were stowed

caused the vessel to be unseawo: thy and was the under-

lying cause of the accident.” ( R. 10, 11)

The respondent in its Amended Answer to the

Amended Complaint of the Petitioner averred:

6 «

FIRST DEFENSE

“Third-party defendant Respondent is the em-

‘ ployer of Jasper King, the plaintiff in this case, and

the accident which is the subject of the litigation oc-_

curred under circumstances making the third-party

defendant responsible to the said plaintiff for benefits

under the Longshoremen’s and Harbor Workers’ Com-

pensation Act, as amended, 33 U.S. C. A. Sec. 901°

et seq. Sec. 5 of said Statute, 33 U. S. C. A. Sec. 905,

provides that upon payment of compensation under the

provisions of the said statute, third-party defendant

is discharged of all liabilities to the plaintiff or any ~

other person otherwise entitled to bring suit against

‘the third-party defendant. Third-party defendant as-

serts that benefits under the said Longshoremen’s and

Harbor Workers’ Act have been tendered and accepted

by the plaintiff. Third-party defendant therefore al-

leges that the said statute is the complete defense to

the Amended Third-Party Complaint and therefore

prays that the action be dismissed as to the Third-

party defendant.” |

SECOND DEFENSE

“To the extent that the amended Third-Party

Complaint purports to set forth a cause of action

against third-party defendant by way of indemnity

‘the third-party defendant denies that there is any con-

tract upon which indemnity may be founded.”

. THIRD DEFENSE

“The Amended Third-Party Complaint fails to

state any ground for relief and fails to set forth any

cause of action against the third-party defendant upon

which relief can be granted, and therefore the

Aménded Third-Party Complaint must be dismissed.”

7

SUMMARY OF ARGUMENT:

A shipowner may hot recover as a joint-tortfeasor, via

* the way of indemnity, from the stevedoring corporation

for injuries to its: longshoremen where the shipowner "

originally as its responsibility and obligation improperly _

loaded a cargo in:such a careless and dangerous manner

as to cause the ship to be ‘unseaworthy and which unsea-

worthiness is the-underlying cause of the in juries and where

the shipowner was not intended to be and was not responsi-

ble for the discharge of the cargo, was not responsible for

or intended to be responsible for the expenses to be paid

to the stevedore for such discharge, and who did not pay

such expenses. The shipowner had no relation, contractual

or otherwise, with the stévedore for the discharge of the

cargo. The stevedore received and followed the orders for

(the discharge of ‘the ‘cargo from the owner -as consignee.

stevedore was to use, and did use, specially manufac-

tured equipment of the owner as consignee designed for

this particular cargo and’ the consignee, as owner, was

obliged to and did use its pier and pier facilities as owner

and consignee. The owner, as consignee of the cargo, deter-

mined and paid the stevedore waiting time, overtime, sick

benefits, social security, old age insurance benefits and de-

termined the hiring and discharging of the stevedore. The

contract was on a long term basis for the discharge of the

owner’s cargo. The contract between the cargo owner, as

consignee, was strictly between the cargo owner, as con-

signee, and the stevedore with respect to damages to the

cargo and with respect to damages to the ship during sthe:

discharge of the cargo. The ship had no title or interest in

the cargo except the right to call upon the cargo owner, as

consignee, for demurrage which may arise from excéss lay

time and to be paid therefor. The cargo owner, as consignee, -

', Was and is responsible to the ship for delays in the discharge

of the cargo, work stoppages, strikes, walk-outs, sit-downs,

harbor congestion, bad weather, quarantine conditions, or

8

for any reason not exempted in the bill of lading or charter

party which gave to the ship owner the right, and only the

right, to be paid for demurrage in excess of the granted

’ lay days. -

The only relief, which petitioner may possibly obtainy

is a new trial,

ARGUMENT

Question: No. I

I. Did the Supreme Court of the United States in its

decision entitled Crumady v. Joachim Hendrik . Fisser

(1959), 358 U. S. 423, 79 S. Ct. 445, 3 L. Ed. 2d 413,

overrule its prior decision in Halcyon Lines v. Haenn Ship

Ceiling and Refitting Corporation (1952), 342 U. Ss. 282,

72 S. Ct. 277, 96 L. Ed. 318?

Answered NO by the majority opinion of the United

States Court of Appeals for the Third Circuit.

The majority opinion of the United States Court. of

Appeals for the Third Circuit, 272 F. 2d 823, at p. 826,

stated their conclusions with — to the first question

as follows: ,

“Thus, the actual 7 OMe of the — case

_-geems to .be that a contractual undertaking of the:

stevedore 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 responsible for the discharge of its own

id

é

Wi... ee ee ee ee

9

goods and arranged with the stevedoring company fer

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 warranty, whether either wrongdoer

must share thé burden of a recovery by the injured

party against the other wrongdoer. In reality we have

hére 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 injury cases the shipowner’ may not require

contribution from the stevedoring company. Halcyon

Lines v. Haenn Ship Ceiling and Refitting Corp., 1952,

342, 72 S.Ct. 277, 96 L. Ed. 318.”

Justice Black, speaking for the Supreme Court of the

, United States in Halcyon Lines v. Haenn Ship Ceiling and

““Refitting Corporation (1952), 342 U. S. 282, at page 285

stated (footnotes omitted): =

“In the absence of legislation, courts exercising

a common-law jurisdicition have generally held that

they cannot on their own initiative create an enforce-

able right of contribution as between joint tortfeasors.

This judicial attitude has provoked protest on the .

ground that is it inequitable to compel one tortfeasor

to bear the entire burden of a loss which has been

caused in part by the negligence of someone else. Others

have défended the policy of common-law courts in -

refusing to fashion rules of contribution. To some

_ extent courts exercising jurisdiction in maritime af-

fairs have felt freer than common-law courts in fash-

ioning rules, and we would feel free to do so here if

_ wholly convinced that it would best serve the ends of .”

justice.

" 10

-. “We have concluded that it would be unwise to —

attempt.to fashion new judicial rules of contribution

and that the solution of his problem should await

congressional action. Congress has already enacted

much legislation in the area of maritime personal

injuries. For example, under the Harbor Workers’

Act Congress has made fault unimportant in determin-

ing the employer’s responsibility to his employee; Con-

gress has made further. inroads on traditional court

law by abolition of the defenses of contributory negli-

gence and assumption of risk and by the creation of

a statutory schedule. of compensation. The. Harbor

Workers’ Act in turn must be integrated with other

acts such as the Jones Act (41 Stat 1007, 46 USC .

§688), the Public Vessels Act (43 Stat 1112, 46 USC

§§781-790), the Limited Liability Act (RS §4281, as

amended, 46 USC §§181 et seq.) and the Harter Act

(27;Stat 445, 46 USC §$190-195). Many. groups of

persons with varying interests are vitally concerned.

with ‘the proper functioning and administration of

all these. Acts as an integrated whole. We think that

legislative consideration and action can best bring

' about a fair accommodation of the diverse but re-

' lated interests of these groups. The legislative process

is peculiarly adapted to determine which of the many

possible solutions to this problem would be most bene-

. ficial in the long run. A legislative inquiry might

show that neither carriers, shippers, employees, nor

casualty insurance companies desire such a change

to be made. The record before us is silent as to the

wishes of employees, carriers, and shippers; it only —

shows that the Halcyon Line is in favor of such a

change in order to relieve itself of a part of its burden

in this particular lawsuit. Apparently insurance com-

panies are opposed to such a change. Should a legisla-

tive inquiry convince Congress that a right to contri--

bution among joint tortfeasors is. desirable, there

11

would still be much doubt as .o whether application

of the rule or the amount ‘of contribution should be

limited by the Harbor Workers’ Act, or should be based

on an equal division of damages, or should be relatively

apportioned .in accordance with the degree of. fault

_ of the parties. |

“In view of the foregoing, and: because Congress

while acting in the field has stopped short of approving _

' the ruie of contribution here urged, we think it would

be inappropriate for us to do so.”

In the opinion in the Halcyon case. written by Mr.

Justice Black, all of the Justices with the exception of two

concurred that there could be no contribution i in joint tort-

feasor non-collision maritime cases. Mr. Justice keed and

Mr. Justice Burton were of the opinion that contribution

ought to be-allowed up to 50%. Just what has occurred to

devitalize the Halcyon case. Congress has not legislated

‘and if the Executive branch of the government thinks that

the Longshoremen’s 2nd Harbor Workers’ Compensation

Act should be amended, they are in a position to present

such a recommendation to Congress. Likewise, the Su-

preme Court has appointed a committee with respect to

- suggested revisions of the Supreme Court Admiralty Rules.

It appears to be obvious that the Executive branch of the

government could make appropriate recommendations to

Congress and hearings could be had on it. It does not seem

appropriate that the Executive branch of the government

should join in the request that this court should legislate

in the matter when it was already said within nine years

ago that it was not appropriate for them to so do. .

- With respect to the holding in the Crumady decision,

supra, it should be pointed out that. the majority opinion

of the Supreme Court makes it clear and if.so stated that

its decision was based upon Ryan Stevedoring (o., Inc., v.

Pan-Atiantic Steamship Corporation (1956), 350 U. S. 124,

76S. Ct. 232, 100 L. Ed. 183. Mr. Justice 7 speaking

12

for the majority of this court in the Crumady case, stated:

“We think this case is governed by the principle

announced in the Ryan case”, 358 U. S. 423, 428,

3 L. Ed. ‘2d, 413, 417.

The Ryan case did not hold that a an operator of a ship,

the owner of a ship, the charterer of a ship, the agent of

a ship, or the ship itself could recover indemnity on ‘the

basis of a tort in disregard of the exclusionary effect of

the Harbor Workers’ Act, without reliance upon a contract.

° The Supreme Court in the Ryan case points clearly

to the effect that the shipowner’s responsibility is based.

upon a breach of warranty, 350 U.S. 124, 132. The Court

specifically stated that the. steamship owner in that case

“relies entirely upon petitioner’s [Ryan Stevedoring

Company] contractual obligation,” and “we [the Su-

preme Court of the United States] do not meet the

question of a non-contractual right of indemnity or of

the relation of the Compensation Act to such a right.”

The majority opinion further stated:

“The ship owner’s claim here also - is not a claim

7 for contribution from a joint tortfeasor. Consequently,

the considerations which led us to the decision in

Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp.,

. 842 U. S. 282,-96 L.. Ed. .818, 72 S. Ct. 277, are not

applicable.”

The force and effect to be given to these statements of

the majority opinion of the Supreme Court in the Ryan

case is best pointed up by the dissenting opinion written

by Mr. Justice Black, in which he was.joined by the Chief

_ Justice, Mr. Justice‘Douglas and Mr. Justice Clark. It will

be observed upon a cursory examination of the Ryan case

that that decision was not based upori the absence of the

13

contractual obligation and was nc* based upon a ruling to

strike down the force and effect of the Harbor Workers’

Act, absent a contractual warranty implied by law arising

from a cer ract.

It would appear that where the Supreme Court in

the majority opinion of the Ryan case expressly stated .

tiat its decision was not based. upon absence of contract

and that it did not reach the exclusionary effect of the

~ Compensation Act, that such was its reasoning. Therefore,

when this-Court subsequently, as it did in the Crumady

case, stated that such subsequent decision was based upon

the Ryan case, it does not seem logical or warranted or

necessary to place a meaning upon such later decision as

suggested by the Petitioner. The Crumady decision now

should be unanimously rejected by this Court.

QUESTION No. II

Il. Did the Supreme Court of the United States in iis

decision entitled Crumady -v. Joachim Hendrik Fisser

(1959), 358 U. S. 423, 79 S. Ct. 445, 3 L. Ed. 413, strike

down the force and effect, absent a contractual warranty,

of section 905 of the Longshoremen’s and Harbor Workers’

Compensation Act,.33 U. S.C. A., $901 et seq.?

Answered NO by*the majority oninion of: the. United

States Court of Appeals for the Third Circuit.

Section 5 of the Longshoremen’s and Harber Workers’

Compensation Act, 4. Stat. 1426, 33 U.S. C. A. £905,

provides : ve

“Sec. 908. Exclusiveness of Liability. The liability

of an employer prescribed in. section 904 of this title

shall be exclusive and in place of all other liabiiity of

_ such employer to the employee, his legal representative,

husband or wife, parents, dependents, next of kin, and ~

anyone otherwise entitled to recover damages from

such employer at law or in admiralty on account of

¢

14

such injury or death, except that if an employer fails

‘ to secure payment of compensation as required by this —

chapter, an injured employee, or his legal representa-

tive in case death results from the injury, may elect to

‘ claim compensation under this chapter, or to maintain

an action at law or in admiralty for damages on account

of such.injury or death. In such action the defendant

may not plead as a defense‘that the injury was caused

by the negligence of a fellow servant, nor that the

employee assumed the risk of his employment, nor

that the injury was due to the contributory negligence

of the employee.”

The majority opinion of the Third Circuit with respect

to the effect of the Crumady decision on the above statute,

declared at page 826:

“We find no indication that.the Supreme Court in the

Crumady case intended to abrogate or disregard the

distinction between a permitted recovery-over based .

on contract and a prohibited misuse of the concept of

' indemnity to obtain contribution from a tortfeasor

who enjoys the protectior. uf the Longshoremen’s and

' Harbor Workers’ Act. We cannot square a recovery in

this case with adherence to that distinction.”

QuusTION No. III’

III. Did the Supreme Court of the United States in

its decision entitled Crumady v. Joachim Hendrik Fisser

(1959), 358 U. S. 423, 79 S. Ct. £45, 3 L. Ed. 413, reject,

overrule or. impair the force and effect of the reasoning of -

the United States Court of Appeals for the Third Circuit

in Brown v. American-Hawaiian Steamship Company (3d

Cir., 1954), 211 F. 2d 16, and Crawford v. Pope & Talbot

(3d Cir., 1953), 206 F.-2d 784?

Answered NO by the majority opinion of ‘the United

Statcs Court of Appeals for the, Third Circuit.

a

15

With respect to this question, the majority opinion of

the Third Circuit: stated (footnote omitted) ;

“How this case might have stood had the steve-

doring company, been employed by the owner or opera-

tor 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, as an affirmative defense,

appellee in its answer asserted that there was no con-

‘tract between these parties. The correctioness of this

allegation was stipulated at trial: Whatever arrange-

ment was made for unloading the cargo, the shipowner

was not party to it and on the present record claims

no standing under it.

“The District Court ruled that in sueh-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-Hawaiian S.S. Co.,

3 Cir., 1954, 211 F. 2d 16, 18 and ‘Crawford v. Pope &

Talbot, Inc., 3 Cir., 1953, 206 F. 2d 784, 792. Any

obligation of a stevedoring company to indemnify a

. . 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 stevedorin; conipany for negligent injury of .

its employee, a result prohibited by the Longshoremen’s

and Harbor Workers’: Act, 33 U.S.C.A. Sec. 901 et seq.

However, it is strongly urged that the Supreme Court

in Crumady y. The Joachim Hendrik Fisser, 358 U.S. |

423, 79S. Ct. 445, 3 L. Ed. 2d 413, has rejected the rea-

- soning and impaired the authority of the Brown and |

Crawford cases.” . .

in Brown v. American-Hawaiian Steamship Corpora-

tion (8d Cir., 1954), 211 F. 2d 16, 18, the Court declared

(footnotes omitted) :

—. -*

“Theré is, however, one aspect of the present, ap-

peal which requires further refinement. Appellant

suggests that irrespective of the contractual relations

between third-party plaintiff (owner) and third-party —

- defendant (employer) in this type of suit, a right of

indemnity exists. where the liability .of the former — :

is secondary or passive while that of the latter is.

primary er active. Such a problem would be posed, for

example, where the owner is held liable to a plaintiff-

employe for a condition of unseaworthiness created

by the employer’s negligence and there is no contract,

express or implied, between them, or, if such contract

exists, it cannot be read to lay the groundwork for an

indemnification claim. In answer to this suggestion we

repeat what we thought had been made clear by the

Crawford case: there can be no action of indemnity

. in these cases which is not based on the violation of

some contractual duty. Were the rule otherwise the

employer could be made to respond indirectly in tort

for damages for which he would not be. answerable .-

under the Longshoremen’s and Harbor Workers’ Act.

Such a rule would be violative of Section 5 of the Act

as well as of the spirit of the entire statute where-

under an employer’s duty to pay compensation to his

injured employees without regard to negligence is sub-

stituted for his common law tort liability. Cf. Pope & —

Yalbot, Inc. v. Hawn, 346 U. S. 4(6, 412, 74 S. Ct.

202. ”

In Note 6 to the Ryan case, supra, page 132, the Su-

preme Court wrote:

“6. We do noi reach the issue of the exclusionary

effect of the Compensation Act upon a right of action

of a shipowner under compurable circumstances with-

out reliance upon an indemnity or service agreement.’

of a stevedoring contractor. See Brown v. American-

Hawaiian S.S. Co. (CA 3d Pa. ) 211 F. 2d 16, 18;

17

' That Court had previously .in Crawford v. Pope &

Talbot (1953), 206 F. 2d 784, declared the same principle

_ and the Supreme Court of the United States affirmed the

game principle in Pope & Talbot v. Hawn (1953), 346 U. S.

406, 98-L. Ed. 143, 74 S. Ct. 202. See also page 146 of

Mr. Justice Black’s dissenting opinion in the Ryan case. -

QUESTION No. IV

IV. If any or all of the answers to the first three

questions is or are YES, then the question is -

May a shipowner sued in a diversity civil action

recover indemnity from ah independent stevedoring ©

contractor where neither the shipowner nor the ship

ure responsible for the discharge of the cargo at the

port of discharge, are not responsible and do not pay

for such discharging, are x h strangers to the con-

tract entered into by tl.e stevedoring company, and

neither are in privity of contract, either express or |

implied.in fact? |

Answered NO by the majority opinion of the United

States Court of Appeals for the Third Circuit.

What has heretofore been said with respect to Ques-

tions'I, II and III, and particularly with respect to Question

III, is complete and adequate rejection of Question IV. It

may also be appropriate that the dissenting upinion in

Crumady v. Joachim Heidrik Fisser, supra, written by Mr.

Justice Harlan and concurred in by Mr. Justice Frank- .

furter and Mr. Justice Whittaker be called to this Court’s

attention.

Mr. Justice Harlan wrote in the dissenting onfidion re

Crumady v. Joachim naan Fisser, et al.,+( 1959} supra,

‘as follows:

18°

“Since my views have not prevailed, however, I

am bound to consider the indemnity issue in light of

_ the Court’s reasoning in the action for unseaworthi-

ness. In this light I must again dissent. As I read

Ryan Stevedoring Co. v. Pan-Atlantic S. S. Corp., 350

U. S. 124, 100 L: Ed. 133, 76 S. Ct. 232, the ship is

entitled to indemnity only if the liability-inducing-

unseaworthiness or hazardous working condition is

created by the stevedore. Here, on the Court’s premises,

Nacirema merely brought into play an unseaworthy

_ condition created by the vessel itself.. Andon the

Court’s further premise that this condition: was the

cause of the injuries sustained by Crumady, I think

neither the decision nor the underlying principles in

Ryan justifies the award of indemnity. Cf. Weyer-

haeuser S. S: Co. v. Nacirema Operating. Co., 355 U.S.

563, 568, 2 L. Ed. 2d 491, 494, 78 S. Ct. 438.”

‘It will be recalled by this Honorable Court that i inthe |

Ryan case, the court was first evenly divided four and four.

However, Mr. Justice Harlan was thereafter shortly ap-

_ pointed to this Honorable Court. The Ryan case was re-

stored to the docket and reargued. Mr. Justice Harlan

made the fifth member of a majority court. In the Ryan

_ ease, the Chief Justice, Mr. Justice Douglass and Mr. Jus-

tice Clark joined in the dissent written by Mr. Justice

Black. Had Mr. Justice Harlan voted with the minority, it ©

would have become the majority, and the Ryan case would

have never become the law of the land. However, we now

have a situation where Mr. Justice Harlan and Mr. Justice

Frankfurter, who joined-in the majority opinion in the

Ryan case, now writes, and we believe correctly so, that

they do not. believe the Ryan case or the Weyerhaeuser case

is authority for the decision in the Crumady case. That is

the exact position of the Respondent. It is respectfully

urged that neither the Ryan case nor the Weyerhaeuser

case is authority for the principle that where the ship’s own

19

_ stowage rendered the ship unseaworthy, that a shipowner

may recover from the stevedore, nor is it authority for the

proposition that a stevedore is liable-if it brings into play

such unseaworthy . stowage condition created and caused

by the ship. It is equally respectfully suggested that the

Crumady decision dealing with third party beneficiaries

is purely dictum and that” the authorities relied upon do

not sustain the princip® enunciated in the Crumady case.

This is'so because the@contract in the Crumady decision

(transcript of record in the Crumady case, p. 97) is clear

beyond reasonable mental difference that the agreement

was made and entered into between

- “the Insular Navigation Company, as owner, operator,

_ charterer or agent”

_ for the named ship and the stevedoring company as con-

tractor. The contract specifically named the vessel, specifi-

cally provided the scheduled arrival at the Port of Newark,

it specifically gave the rates and dealt with all the matters

under the situation. It is specifically signed on behalf of the

insular Navigation Company, owner, operator, charterer,

' agent by C. J. Smith and it was likewise signed by the

stevedoring contractor.

In the Ryan stevedoring case, in addition to what is

- hereinafter referred to in the analysis of that case, in the

clear, unequivotal words of the majority opinion, stated:

“This obligation is not a quasi contractual obliga-

tion implied in law or arising out of a non-contractual.

relationship.” 350 U. S. at p. 133. ~ ae

An examination of the Weyerhaeuser case, where there are :

no dissents, in .an opinion written by Mr. Justice Clark,

z

itis stated:

“Petitioners claim for indemnity primarily rests

on contractual relationship between it and respond-

ent.” —_— S. vid 565. ‘ :

~~ 7

20

Again, this entire Court, including those who partici~

pated in the Crumady ease; did not dissent or disagree with

the’ Court in the Weyerhaeuser case, where it stated:

“If in that regard Respondent rendered a sub

- standard performance which led to foreseeable liability

of the Petitioner, the latter was entitled to indemnity

ABSENT CONDUCT ON ITS PART SUFFICIENT

TO PRECLUDE. RECOVERY.” (Emphasis sup- .

plied.) 355 U. S. 567.

In coiniilina the Weyerhacuser opinion, this court.

unanimously agreed that:

“In view of the new trial to which petitioner is

entitled, we believe sound judicial administration re-

quires us to point out that in the area of contractual -

_ indemnity, in application of the theories of active or

passive, as well as primary or secondary negligence

is inappropriate. Ryan Stevedoring Co. v. Pan-Atlantic |

S.S. Co., supra.” 350 U. S. at p. 132-133.

In the Weyerhacuser case, the Honorable Levenworth

Colby, of Washington, D. C., argued the cause for the

United States as Amicus Curiae..In Mr. Colby’s brief, pp.

1801-1802, U. S. Supreme Court Reports, er s Edition,

Annotated, will be found this statement:

“Since the contractor’s liability to the cuiianiais

is of-a purely contractual nature, it can be defeated

only if the customer has breached a contract duty

owed by it to the contractor.”

Again, at p. 1802, is found the following:

“The concépt of active and passive or primary and

rae

rae

“21

secondary, tortous conduct or negligence, developed in

the law of quasi contractual or tort indemnity have

no validity in this area of contract. Ryan Stevedor-

ing Co. v. Pan-Atlantic S. S. Corp., 350 U. S. 494, 100 .

L. ed. 133, 76 S. Ct. 232. See also Seawright v. Garcia

Cia Ltda. (D. C. P.) 138 F. Supp. 881.”

It is difficult to square the Petitioner’s and the Govern-

ment’s argument in this case with the cases of Ryan Steve-

doring and Weyerhaeuser.

QUESTION No. V ’

V. How may any court be expected to hold as a matter

of law that a shipowner is a third party beneficiary under

a contract without having before it all the terms of the con-

tract whether written or oral, passes comprehension?

‘There is no possible legal foundation or basis for a

third party beneficiary claim on behalf of the Petitioner,

but even if such a basis existed the Petitioner completely

failed in the proof of the terms of the contract. The words

of Judge Swan, in the case of THE LIZZIE D. SHAW, 95

F. 2d 65, at page 67, put at rest any argument about the

rights of a third party beneficiary without such person

first proving the terms and conditions. Judge Swan stated:

“How a libelant can hope to recover on a contract,

even if made for its benefit, without offering proof of .

‘the terms of the contract sued upon, passes compre-

hension. But, even if this hurdle were jumped, the fact

remains that the contract between the Hughes corpora-

tion and the respondent was not made for the libelant’s

benefit. The Hughes corporation, having contracted .

with National to provide carriage at a freight rate of

70 cents per ton, for its own profit procured the re-

spondent to do the work for 65 cents per ton. Recent

een en Une

degisions of this court are clear authority that the

_ libelant.may not recover on the respondent’s contract

with James Hughes, Inc. The Castleton (C. C. A.)

64 F. (2d) 11, 13; Fat-Top Fuel Co. v. Martin (C. C.

A.) 35 F. (2d) -39, 41, certiorari denied .299 U. S.

585, 57 S. Ct. 110, 81 L. Ed. 431. The case of New

Jersey Steam Nav. Co. v. Merchants’ Bank, 6 How.

. 844, 12 L. Ed. 465, is not to the contrary. There Harn-

den, who made the contract of carriage, was treated —

~~as the bank’s agent and the bank was allowed to sue

in its’own name as the undisclosed principal. 6 How.

' 344, at page 380, 12 L.. Ed. 465. Here the Hughes cor-

poration, whose cantract the libelant seeks to enforce,

was not employed by the libelant; there was no

agency.” Certiorari denied, 302 U. S. 764..

\ | a

. QUESTION No. VI.

VI. “Where saieuaaa the stowage of the cargo by the

‘ship was faulty and ‘which fault admittedly rendered the

vessel unseaworthy, may the shipowner recover indemnity _

from the stevedoring concern which went aboard the ship at: |

and under the directions and orders of the cargo owners as

consignee, and where the consignee, as owner of the cargo,

in its own behaif and for its own benefit, made an extensive

written agreement with: the stevedoring company to dis-

charge all of its cargo and to pay for such discharge with-

out designation’ of. any ship, vessel or owner and with the

- designation that the stevedore would use especially prepared

equipment for the consignee and use the pier under the

control of the cargo owner as consignee, and where the

owner, as consignee, had full and complete responsibility

for the discharge of the cargo, and where the owner, as -

consignee, had full and complete responsibility to ship

owner for the accruing of demurrage, including lay time

caused by strikes, lockouts, harbor congestion, bad weather,

23

and where the cargo owner, as consignee, assumed full

and complete responsibility for damage to the ship ‘and

damage to the @r o while being discharged?

Even should the court believe that questions I to V

inclusive. do not bar the Petitioner from a recovery from

the Respondent in this case, the Petitioner is barred be-

cause of fault on its own part in improperly — * the.

cargo.

7 The majority opinion of the Circuit Court in this case

stated (R. 21):

“However, appellant claims indemnity -from the steve-

doring company on the theory that primary respon- _

sibility for the accident and an obligation to indemnify

the shipowner should be imposed on the appellee be-'

cause the immediate cause of the accident was ap-

pellee’s negligence in unloading the cargo, improper

though the stowage admittedly was.”. ©

_° The original plaintiff alleged that Petitioner had im-

properly stowed the cargo. The Petitioner alleged that it

had improperly stowed the cargo. It concedéd that such

alleged improper stowage caused the .vessel to be unsea-

worthy. These facts are averred in the Petitioner’s. own

pleadings. In the Ryan Stevedoring case the stevedore had

agreed in, writing to. and did do the loading at the port of

origin as well as the discharging at the port of discharge.

Liability was placed upon Ryan because of the fact that

Ryan improperly stowed the cargo at the port of loading.

Liability was not imposed upon Ryan because it failed at .

the port of discharge to discover the faulty stowage. In

_ that case the majority of the court said, 350 U. S. 134:

_ “Whatever may have been the. respective obligations

of the stevedoring contractor and of the shipowner

to the injured longshoreman for proper stowage of

the cargo; it is clear that, as between themselves, the

24

contractor, as the warrantor of its own services, ¢an-

not use the shipowner’s failure to discover and correct

the contractor’s own breagh of warranty as a.defense.

Respondent’s failure to discover’ and correct petition-

er’s own breach of contract cannot here excuse that

breach.” :

It is the héliing 0 of the Ryan case that the stevedore

‘was responsible to the ship because Ryan improperly

stowed the cargo at the port of loading. In the-case which

_this court is now considering the Respondent did not stow

the cargo and Respondent was not responsible in any way

for thé. stowage. The Petitioner itself was responsible for

the Joading of the cargo and was, and is, responsible for

_ the improper’stowage. This ase is converse of the Ryan

“ease. The principle of. improper stowage enunciated in the

Ryan case sustains the Respondent’s position. The Peti-

tioner has its right indemnity, if any, fn fact and in iaw

’ against the stevedore which stowed the cargo in San Carlos,

Negros Island in the Philippines.

The defective and dangerous stowage of the cargo

‘ which rendered the_ship unseaworthy was, and is, the re-

sponsibility, of the Petitioner. It is not even suggested and

cannot he “argued with a scintilla of accuracy that the

Respondent, who. contracted with the owner consignee to:

remove the cargo, had anything to do, directly or indirectly,

with the improper stowage of the cargo. Nor is it suggested,

and it car.not be accurately stated, that the Respondent .

was legally responsible, directly or indirectly, for sueh.

faulty stowage.

If this court intended in the Crumady case to overrule .

the Ryan case then it is respectfully urged and suggested

that this court should not have stated in its Imajority’ opin--

ion that the Crumady case was ruled by Ryan.

In the casé of Hagans v. Farrell Lines, Inc. v. Lavino

_ Shipping, Company, 237 F. 2d 477 the principal of mutual

rights in this class of cases is well stated. At page 482 the

.court wrote: ;

*

De te At ea -

- 25

“The instant case presents the converse of the

Ryan, situation. Here, the shipowner, Farrell, was

-held responsible in the district court to the injured

longshoreman because of a defective winch, i. e., un-

seaworthiness or a negligent failure to furnish a safe

place te work. But the stevedoring contractor, Lavino,

had not undertaken to perform Farrell’s non-delegable .

duty, nor did Lavino create the defective condition. To

the contrary, Farrell assumed an express obligation

running to Lavino to furnish. adequate winches in

. good order, and, as the evidence shows, to maintain

and repair them.

“{5] Upon the ‘makes of the above cited de-,

cisions, it results that Lavino, had it paid its. em-

_ employee on account of injuries sustained, would be

‘ entitled, if this were all to the case,-to be indemnified

by Farrell therefor. Mowbray v. Merryweather,

supra; Restatement, Contracts, Section 334. A for-

tiori, Farrell is not entitled to indemnity from Lavingo.

Thus, in American Mutual Liability Ins. Co. v.

Matthews, supra, it was said:

“In the case at bar no promise by the employer

can be implied that he ‘will not use equipment

furnished him by the shipowner to be used for the very

' purpose to which it was put. Nor can a promise be

implied that he will use care to detect any defect in

the equipment which patently existed when the equip-

ment was delivered for use by the employer. To imply

such a promise would mean that the employer agreed

_ to protect the.shipowner against liability arismmg out

of the shipowner’s own negligence. In the absence of

an exxpress promise, such an- implication would be

utterly unreasonable.” 182 F. 2d 322, 324.

“16] Accordingly, it can only be concluded that

Hagans’ injury is the result, as the jury found, of

Farrell’s own conduct, which at once violated its duty

26

to the longshoremap and to Lavino. As. held in the

Ryan decision, supra, the promisor cannot use the

promisee’ s failure to discover and correct the promi-

‘ gsor’s own breach as a defense. See, Restatement, Resti-

tution, Section 93, and Comment a.

“Farrell, however, bases its claim to indemnity

upon the asserted neglect of Lavino, first, in using

.the winch knowing its condition to be defective, and

second, upon the conduct of.the hatchman, Oliver, in

signalling the draft out of the hold without making

certain Hagans was no longer in its path.

“Knowledge of and acquiescence in the existence

of a defective appliance or condition may:prevent, the

fruition of the right to indemnity. Restatement, Resti-

tution, Sections 93 and 95, and Reporters’ Notes. But —

it does not. necessarily follow that the burden to in- -

demnify is, thereby created. .

“'7] Where the parties have violated similar

duties to the injured person, neither is entitled to re-

lief against the other. Union Stock Yards Co. v. Chi-

cago, B. & Q. R. Co.,-1905, 196 U. S. 217, 25 S. Ct. 226,

49 L. Ed, 453. Absent the compensation act, and hy-

pothesizing the legal impossibility of contribution, the

independent neglect of Lavino to Hagans would

qualify Lavino as a joint tort-feasor with Farrell,

in which event Farrell could not recover either .con-

tribution or indemnity. Restatement, Restitution,

Section 102. But, as we have already stated, Farrell’s

right to indemnity must arise out of the legal relation:

ship between it and Lavino, and not out of the re-~

lationship to the employee. To this proposition we are

previously committed by our decisions in the Brown

and Crawford cases, supra ; see also, Slattery v. Marra

" Bros., Inc., supra. :

“Here, Farrell was under a continuing. respon-

sibility to Lavino for the good order and maintenance

' of the winches. It fell down on the job. Indeed, it went

Nam ndin NA chance teers,

Dre rat ae Nee om

27

further, for its repairman gave Lavino affirmative

*. approval of the equipment in the presence of a ship’s .

officer. At most, Lavino used the defective winch only

_ a few times in the hour and a half which intervened

between commencement of the use and the accident to

Hagans. We see nothing in this situation which should

require Lavino to indemnify Farrell. McKay v. Pedi-

gree Fabricks, Inc., Sup. 1947, 74.N.Y.S: 2d 386.

Farrell’s complaint that the hatchman erred in signal-

ling the draft out of the hold before ascertaining that _

Hagans was out of the way does not amount to other

than contributing neglect; except for the fact that

the hatchman tripped on his way across the deck, he

‘would have had adequate time to warn Hagans. Noth-

ing ig the record suggests intentional or reckless con-

duct on the part of Lavino which would permit the

conclusion that Lavino’s violation of duty toward

Farrell supersedes Farrell’s violation of duty toward

Lavino. See Restitution, Section 97.

“Reliance by Farvell upon cases which charac-

terize the conduct of the indemnitor as the “sole”,

“active” or “primary” cause, does not assist, for as

stated, the indemnitor was held to have brought about

the condition or defect for which the indemnitee was

charged. Here, the ground upon which Farrell was

‘field liable to Hagans was its own doing; as between

Farrell and Lavino, Farréll had assumed the respon-

sibility. If anything, Lavino only contributed to the

) happening of the accident. But if Lavino failed to.

perform its work properly, we are constrained to hold

that, in the face of mutual violations, Farrell.is not

entitled to. full indemnity, and, of course, it cannot

- have contribution.”

The case of MacPherson. v. Buick Motor Corporation,

217.N. Y. 382, is authority in a tort case that the injured

party may recover directly against the manufacturer of a

28. -

dangerous product. The Buick case is not authority in this

class of cases for the proposition asserted by the Petitioner.

It was a negligence case—Cardozo, J., stated page 385:

. - ; . .

“The charge is one,——of negligence”.

+

As indicated above this court recently wrote in the

Weyerhaeuser case:

“If in that regard Respondent rendered a sub-

standard performance which led to foreseeable lia-

bility of the Petitioner, the latter was entitled to in-

demnity ABSENT CONDUCT.ON ITS PART SUF-

FICIENT TO PRECLUDE RECOVERY”. ‘ Empha-

_.sis supplied). 355 U. S. page 567. — :

An analysis of the Petitioner’s pleadings demonstrates

clearly that the bag which caused the eollapse of the tier

was the bag which had been improperly placed, or shifted,

at the bottom of: the tier. Under the Petitioner’s own state-

ment of this case, its acts were those which caused the in-

jury to the original plaintiff, or at best contributed to that

. injury as a joint tort-feasor.

It is provided by the rules of this Court that the Gov-

ernment may file a brief for the United States as Amicus

Curiae without first obtaining the consent of the parties.

It is respectfully suggested that the brief of the Govern-

ment is not helpful, but, on the contrary, it is confusing

as to the policy of the executive departments of the United

States. * are

The administration of the American Merchant Marine,

owned by the Government of the United States, -has been

entrusted to the Maritime Division of the Department of

Commerce. The Secretary of Defense, as well as Secretary

of the Navy and'the Secretary of Labor, are vitally ‘con-

cerned when.it comes to the question of our Merchant

’ Marine in the matter of national defense and security. In

its Amicus Curiae Brief, the Government failed to give the

Court the benefit of the policy position of the Maritime

29 P

Commission or the executive Sevuitioans: . position with re-

spect to the various bills placed in Congress dealing with

the question of the responsibility in this class of cases. The -

suggestion that the United States has an interest in this

question is undoubtedly true, but it is doubted that the ex--

ecutive departments of the Government of the United States

have arrived at and issued a policy with respect thereto. The

Respondent wishes, of course, that the Court should have

- the benefit of the ‘policy positions of the various executive

_ departments of the Government of the United ‘States with

respect to the issue of joint tortfeasors in this class of ‘cases.

The brief does not give the Court the benefit of the testi-

mony of any of the personnel of the executive departments

which have the administration of the.Merchant Marine un-

der their supervision, nor does it give the Court any help

with respect to the number of bills that have been intro-

duced in Congress with respect thereto, and whether or not

hearings have been held, and what was the policy stated by

the Maritime Division of the Department of Commerce.

It is not believed that the rae intended the Depart-

ment cf Justice to throw the weight of the United States

on one side or the other with respect to a lawsuit between

private parties. The far reaching effect of the suggestion

- contained in both Petitioner’s brief and that of the. Amicus

Curiae has already been answered by this Court in the

Halcyon decision.

Some of the national, as wail ‘as the international,

problems and the background of our Mérchant Marine are

outlined in the May issue of 1960 of the.Columbia Law

Review, page 712. If the Maritime Commission and .other

executive departments, including Labor and Defense, .

actually. are in favor of the abolition of the Halcyon deci-

sion, the rules. provide that their representatives may

appear and file a brief with the Court. If they do not favor

it and Congress has not yet determined upon it, it is respect-

fully suggested that the brief Amicus Curiae be considered

in that light.

It appears that the underlying chief complaint of both -

30

the brief of the Petitioner and that of the Amicus Curiae

is that the rulings of this Ceurt on the question of unsea-

worthiness and liability of the ship therefor are too harsh.

The suggestion by the Petitioner and by the Amicus Curiae

. briefis, or appears to be, a desire to shift such non-delegabie

responsibility for seamen and for longshoremen to the

stevedoring companies.

The indulgence of the brief Amicus Curiae and the

assertion of facts admittedly not of record, but which could

have been accurately ascertained and properly placed in

evidence, does not appear to-the Respondent to be helpful

or to the best interest of anyone.

With respect to the so-called: strict ruling’ by this Court

~ as to unseaworthiness and non-delegable duty of the vessel,

this question could be disposed of very easily by the execu-

tive departments, including that of the Department of

Justice, making proper recommendations to the Congress -

of the United States for legislation pertaining thereto.

The argument on page 5 of the Amicus Curiae brief

seems to urge that this Court should extend further the

Crumady decision so as to permit a ship’s claim to be as-

serted directly against the stevedore without any proof of

contractual rights and obligations of the respective parties

and without régard .to the limitations and restrictions. in

the Longshoremen’s and Harbor Workers Act. The Amicus

Curiae brief bases the necessity for such an extension of

the Crumady case on the ground that it would avoid circuity

of suits, i.e., the shipowner would have to sue the’United

- States or other consignee or consignor who hired the con-

tractor on his contract of carriage with the shipowner, and

then the consignee or consignor in turn would have to seek

recovery on its contract with the stevedore. This argument. .

must fall because the Federal Rules of Civil Procedure

permit a defendant, or defendants, to bring if third party

defendants, and likewise the Supreme Court Admiralty

Rules permit the filig of cross-libels and the impleading

of other parties respondent. -It is submitted that such a

&

31

‘° procedure is far better than a hazardous guess as to the

~ terms of the bill of lading, the terms of the charter party,

whether it be a time charter, voyage charter or private .

contract. It would be better to have the terms of the con-

tract between the purchaser oi the cargo and the ship,

the owner of the ship and the cargo, the receiver of the

cargo, and the terms of the-contract of the owner of the

cargo with the stevedore all before the Court.. In reality,

what this Court is.being asked to do is to not only strike —

down the exclusionary provision of the Longshoremen’s and

Harbor Workers’ Act, but to strike down the entire basis :

of the Avt. If that is-the policy of the executive depart-

ments of the Government, it should go to Congress for such .

legislation. It should not ask this Court’ to legislate.

The brief Amicus Curiae, Note 5, page 10, admits ©

that the record is barren of the obligation of the parties, -

but suggests . that probably the ship and its owners are

‘ereditor beneficiaries. It is not believed that it was the

intention of this Court when it promulgated the rule per-

mitting the Government to file a brief Amicus Curiae to

lend its great weight to the aid of a private party in litiga-

‘tion on assumptions not of record and which the majority

opinion of the Court of Appeals declared did not exist.

The tenor of the brief Amicus Curiae is that the

Respondent was hired for the purpose of performing work

_ and responsibilities of the ship to discharge the cargo. The

expression, did not hire directly, used in both the Petitioner’s

brief and that of the Amicus Curiae appears to wish to

~make this Court believe that the stevedore was hired in-

directly ‘by the ship to do the discharging. Again, the

majority opinion ruled twice that this innuendo was ill

founded and no effort has been made by anyone to ask leave

to put in evidence to sustain the correctness of that in-

nuendo. It is submitted that the assumption by the brief

Amicus Curiae that the Respondent: was hired in this case

to perform work and responsibilities in the discharge of the

cargo was incorrect and totally unsupported by any evi-.

—_—

,

ra

Ps

ae a /

dence. It is not helpful to refer to historical situations and

then to ask this Court fo try to predicate a far reaching

decision upon facts and contracts which are completely

different than the historical situation. --,

In passing, it may be noted that the Honorable Leven-

worth Colby, in his briefs before this Court in cases of this

class declared that indemnity was not based upon negli-

‘gence. The brief of Amicus Curiae in reality is urging

this Court to adopt a principle not in keeping with either

the Ryan stevedoring case or the Weyerhaeuser case and

in direct conflict with the Halcyon decision. It is submitted

that the holding of the majority of the Third Circuit was

that the stowage was admittedly faulty and that: the-ship-

owner asserted none and claimed no rights under the con-

tract between consignee and stevedoring contractor. It is

- not alleged in the: Petitioner’s pleadings—and of course it

would not. be true—that the contract with the stevedore was

. made for the ship. It is not alleged by the Petitioner that

‘the ship was responsible for the unloading and discharge of

the cargo It is not alleged by the Petitioner that the ship

- assumed any responsibility, directly or indirectly, for the

discharge of the cargo.

On page 6 of the Amicus Cantis brief, it is argued:

“When a stevedoring contractor goes aboard a

ship to perform the shipowner’s requirements .. .

contractor warrants that it will perform its service.

competently and safely.”

The stevedoring contractor did not go aboard this ship to

perform. the shipowner’s stevedoring requirements. This

is a pure assumption without foundation and it was so de-

” elared by the majority opinion of the Court of Appeals. The

National Sugar Refining Company has offices in -Philadel-

phia. It could have been sued in Philadelphia. In fact, both

it and the Respondent could have been sued by the Peti-

tioner in this litigation but such was not done.

In the first majority opinion filed-by the Court of Ap-

33 .

peals, in which six of ‘the Judges concurred, the Court of

_ Appeals declared (R. 21):

\

“How this case might have stood hail the ship-

owner employed the stevedoring company to unload

the cargo in question we need not and do not decide.

For appellant neither alleged in its third-party com-

- plaint nor sought to. prove any contractual relation be-

tween shipowner and stevedoring company. Rather,

as an affirmative defense, appellee in its answer as-

serted that there was ‘no contract between these

_ parties. The correctness of this allegation was stipu-

. lated at trial.. Thus, whatever arrangement was made

‘for unloading the cargo, the shipowner was not party

to it and-claims no benefit under it.”

Thereafter, the Court of Appeals, on the basis of the

Crumady case, granted a rehearing on April 7, 1959 (R.

31). The case was reargued on Uctober 9, 1959, and the

majority of the Court of Appeals, 1 in its last opinion, stated

(R. 33):

“How this’ case might have stood had\the steve-

doring 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, [fol. 286] as an

‘affirmative defense, appellee in its answer asserted

_that there was no coritract between these parties. The

correctness of this allegation was stipulated at trial.

Whatever arrangement was made for unloading the

cargo, the shipowner was not party.to it and on the

present record claims no standing under it.” (Empha-

sis supplied. )-

"It will be recalled that the Petitioner, after the Dis-

‘trict Court (Judge Clary) directed a verdict against it,

34

did not file any post-trial motions with that Court and has

not from that day to this made any attempt of any nature

to place the ‘charter party, bill of lading and stevedoring

’ eontract in evidence.

Something might be said in respect to the question of

. third-party beneficiaries, even though, as noted in THE

LIZZIE D, SHAW, supYa, it passes comprehension how a

party may claim the benefits of a contract without proving |.

its terms and conditions. In view of the availability of the

owner, as consignee, in the very same district as the Re-

-spondent, one may draw one’s own conclusions as to why

those contracts were not subpoenaed and not asked for,

and why courisel for the Petitioner stipulated that there

was no privity of contract.

The case of IJsbrandsten Co. ‘he: v. Local 129i of In-

ternational Longshoremen’s.Ass’n, 204 F. 2d 495, involved

a suit on a contract by one not a party to it.

Isbrandsten Company was the time charterer of a és

called the NYCO, Isbrandsten in turn chartered the ship

to the Scott Paper Company for the purpose of transport-

ing pulp from. Nova Scotia to Philadelphia. .Under the

terms of the charter party, the Scott Paper Company’ was

to load and unload the vessel. Scott Paper Company in turn

hired the Lavino Shipping Company to do the unloading.

When the vessel got to its destination, the employees of La-

. vino started to unload it and during the unloading stopped .

work contrary to the provisions of the contract which their

union had with their employer. The parties to the contract

were the Philadelphia Marine Trade Association, of which’

Lavino Shipping Company was a member, as collective .

bargaining agent for those of its members who employ

longshoremen, and Local 1291 of the International Long-

shoremen’s Association. The contract provided, among

other things, that there was to be no work stoppage pend- .

ing arbitration of. disputes which might arise. Isbrandsten,

alleging that the delay in unloading the ship caused it dam-

age, sued under Section 301(a) of the Labor Management

35

Relations Act-of 1947> Alternatively it claimed, there be-

ing diversity of citizenship and the requisite jurisdictional

amount, to be able to récover as a matter of common law.

AB able and sonsned Cenuenien of oe rights yd eon parties

is given in the opinion of the United States Court of Appeals

for the Third Circuit. That Court, composed of Judggs

Maris, Goodrich and McLaughlin, Goodrich writing the

opinion, concluded that there was no 0 liability, the’ court

stating at page 497:

“We see no possibility that Isbrandsten can be a

creditor beneficiary of this labor union. The labor

‘union was a complete ‘stranger to Isbrandsten so far

.as this transaction is concerned. Neither owed the

other anything. And, therefore, there was no obliga- -

tion on the part of either to do anything to or for the

other. Nor do we see any possibility of making out of -

this situation a donee beneficiary relationship. This

is not like a contract where a father buys.an insurance

policy to build up an estate for his son. It was aAabor

contract made between this association and_a/union.

The contract recited that the association fas acting

on behalf of its members who employ longshoremen.

Lavino is one of those members. But it does not appear

that either Scott or Isbrandsten was a member,. and

there is no allegation that either one employed long-

shoremen.

> “There is considerable language in the Restate--

ment and in the cases and decisions about ‘intent’ and

‘accompanying circumstances’. From that the argu-

‘ment is made to us that the court should not have dis-

missed under Rule 12°but should have heard the plain-

tiff upon an attempt to make a showing of the supposed

intention of the parties with eee to persons te-bene-

fit by the contract.

“But ‘we think that the whole siting of this fact

. Situation as described in the.complaint and exhibits

is one which completely negatives a gift transaction

é

36

under any possible interpretation of that term. The

contract between the association and the labor union

was a usual type of collective bargaining agreement.

The contract between Isbrandsten and Scott was a

charter party in the ordinary fofm made upon stated

‘money consideration. We do not have before us a .copy

'~ of the contract between Scott and Lavino, but the com- —

-plaint describes it as an agreement whereby Lavino

promised Scott to discharge a cargo of wood pulp from .

the vessel. We cannot think that Lavino was making

a gift to Scott or that Scott was making a gift to

Isbrandsten. In other words, all the transactions were

_usual business transactions in which parties were

agreeing to do things for and pay money to each other.”

The case of Robins Dry Dock & Repair Co. v. Flint,

et al., 275 U. S. 303, was a libel by time charterers of the

_ Steamship BJORNEFJORD against the Dry Dock. Com-

pany to recover for loss of use of the steamer. Libellants

recovered in both courts below, a writ of certiorari was

granted, and the Supreme Court, by Mr. Justice Holmes,

delivered an opinion reversing the two lower courts. The

Court said, at page 307:

“The present libel ‘in a cause of contract and

damage’ seems to have been brought in reliance upon

an allegation that the contract for dry docking be-

tween the petitioner and the owners ‘was made for. the

benefit of the libellants and was incidental to the afore- _ |

said charter party’ &c. But it.is plain, as stated by the

Circuit Court of Appeals, that the libellants, respond-

ants. here, were not parties to that contract ‘or in any

‘respect beneficiaries’ and were not entitled to sue for

a breach of it ‘even under the most liberal rules that

permit third parties to sue.on a contract made for their

benefit.” 13 F. (2d) 4. “Before a stranger can avail

‘himself of the exceptional privilege of suing for a

_ breach of an agreement, to which he is not a party, he

- must, at least show that it was intended for his direct

37

benefit.’ German Alliance Insurance Co. v. Home °

Water Supply Co., 226 U. S. 220, 230. Although the

respondents still somewhat faintly argue the contrary,

this question seems to us to need no more words.

The above statement of the law is in consonance with

the decisions dealing with contracts for the carriage of

goods, discharge of goods and the rights of time charterers,

sub-charterers and other parties referred to in the Peti-

tioner’s brief. For example, a sub-charter of a vessel, even’

on the same terms as the original charter, does not create

any contract relation between the sub-charterer and the

owner; The BANES, 221 F. 2d 416. See also Actieselskabet

Dampsk, Thorbjorn v. Harrison Co., 260 F. 287; Damp-

skibs Aktieselskabet Thor'v. Tropical Fruit Co., 281 F. 740;

_ Phosphate Mining Co: v. Unione Austriaca Navigazione

Gia Austro-Americana & Fratelli Cosulich Societa Anonima,

‘3 F. 2d 239; THE NORTHERN NO. 29. Flat-Top Fuel

Co., Inc. v. Martin, 15 F. Supp. 543.

Both the Petitioner and the brief as Amicus Curiae

apparently go on the basis that a stevedore, regardless of

what may be the factual and contractual situation, ipso

facto insures the ship in this class of cases. .

It is respectfully suggested that the court reéxamine

the rulings for which it is now asserted the Crumady case

’ stands: It is the opinion of the Respondent that there cannot

be any doubt but what the ship was a party to the contract

in the Crumady case and that the ship had full rights and

benefits under it. ‘The contract expressly so provided and

regardless of what may have been said or is said to the con-

trary, the record proves it. .The other part of the Crumady

case with respect to a stevedore’s bringing into play an

already dangerous and unseaworthy condition of the vessel

thereby making the stevedore solely responsible, suggests

a further review by this court.

38

There does not seem to be any necessity to add fur-

ther to the reasonitig of Justice Black in the Halcyon deci- .

ion as to why this court should not take the action urged

By the Petitioner, i.e., legislate in re the Longshoremen’s

and Harbor Workers’ Act. , |

Whether or not the position of the Solicitor General

is correct is not for the Petitioner, Respondent or this Court

to decide. It is for the Congress of the United States and

no one is in a better position to have a hearing before the

proper Committees of the House and Senate with respect

_to such matters than the Executive Departments, including

-the Department of Justice.

7 It is respectfully submitted that neither the Executive

Department nor this Court under the Constitution of the

United States is the Legislative branch of the Government

where the Legislative branch has already acted in the mat-

ter and stopped short of what the Executive Department

now asks this Court to do.

Ginchusion

, It is respectfully suggested and firmly urged that the .

decision of the majority of the United States Court of

: Appeals Third Circuit be unanimously affirmed.

_ Respectfully submitted,

J. PAUL ERWIN, JR.

_ JoHN V. LovitT —

GEORGE. E.. BEECHWOOD

Counsel for Respondent

2009 Walnut Street _

Philadelphia 3, Pa.

BEECHWOOD AND LOVITT

Of Counsel ,

|

SUPREME COURT OF THE UNITED STATES

No. 35.—OcTOBER TERM, 1960.

Waterman Steamship Cosine Cn. Writ of Certiorari

tion, Petitioner, to the United States

ve. - Court of Appeals for —

_ Dugan & McNamara, Ine. the Third Cireuit.

[November 21, 1960.]

Mr. Justice Stewart delivered the opinion of the .

Court:

The petitioner is the owner of the vessel S. S. Afoundria.

The respondent is a stevedoring company. A longshore-

man employed by the respondent was injured aboard the

Afoundria while engaged with other employees of the

_ respondent in unloading the ship atthe port of Phila-

delphia.: ‘The cargo consisted of bagged sugar. The

' longshoreman was 0c we in the hold, and his i injuries

resulted from the collapse of a vertical column of hundred-

pound bags which the unloading operations had left

without lateral support.

He sued the petitioner in the District Court for the

Eastern District: of Pennsylvania to rceover for -his

‘injuries. The petitioner settled the claim and, by way of -

a third-party complaint, sought to recover from the

respondent the amount paid in satisfaction of the long-

shoreman’s claim. ‘The third-party complaint alleged

that improper stowage of the cargo ' had created an unsea- —

worthy condition in the ship’s hold which had imposed

absolute liability upon he ations as shipowner for the

longshoreman’s injuries, but that “the direct. proximate,

avtive and substantial cause of the accident’ had been

' The cargo had been loaded in.the Philippines several weeks earlier

by a stevedore unrelated to the parties to the present proceeding.

2 WATERMAN S. S.-v. DUGAN & McNAMARA.

the negligence of-the respondent, who, by “failing to per-

form the contracted stevedoring services in a wate,

‘proper, customary, careful and workmanlike manner,”

had brought the existing unseaworthy condition into play.

As an affirmative defense the respondent stevedore

_ alleged that there had been no direct contractual relation-

ship between it and the petitioner covering the stevedoring

services rendered the Afoundria in Philadelphia. At

the trial the parties stipulated that this allegation was

correct, it appearing that the consignee of the cargo, not

' . the petitioner, had actually engaged the respondent to

unload the ship. The District Court directed a verdict

for the respondent, holding that a shipowner has no right

‘of indemnity against a stevedore under the circumstances

alleged in the absence of a direct contractual relationship

between them. -The Court of Appeals for the Third Cir-

cuit affirmed in an en banc decision, three judges dissent-

ing.” Certiorari was granted to consider whether in a

. ‘situation such as this the absence of a contractual rela-

‘ tionship between the parties is fatal to the indemnity

claim. 362 U.S. 926. :

In Ryan Co. v. Pan-Atlantic Corp., 350 U. S. 124, it

was established that a stevedoring contractor who enters

into a service agreement with a shipowner is liable to

indemnify the owner for damages sustained as a result of

the stevedore’s. breach of his warranty to perform the

obligations of the contract with reasonable safety. This

warranty of workmanlike service extends to the handling

of cargo, as in Ryan, as well as to the use of equipment

incidental to cargo handling, as in Weyerhaeuser S. S. Co.

v. Nacirema Co., 355 U. S. 563. The warranty may be

breached when the stevedore’s negligence does no more

than call into play the vessel’s unséaworthiness. Cru-

mady v. The J. i. Fisser, 358 U. S. 423, 429. The fac-

? 272 F. 2d 823 (on rehearing). .

WATERMAN ’S. S. v. DUGAN & McNAMARA. 3

tual allegations of the third-party complaint in the present

‘ case comprehend the latter situation.

In the Ryan and Weyerhaeuser cases considerable

emphasis was placed upon the direct contractual relation-

ship between the shipowner and the stevedore. If those

decisions stoad alone, it might well be thought an open

question whether such contractual privity is essential to

support the stevedore’s duty to indemnify. But the fact

is that this bridge was crossed in the Crumady case.

There we explicitly held that the stevedore’s assumption

of responsibility for the shipowner’s damages resulting

from unsafe and improper performance of the atevedoring

services was unaffected by the fact that the shipowner was

not the party who had hired. the stevedore. That case

was decided upon the factual premises that the stevedore

had been engaged not by the shipowner, but by the party

operating the ship under acharter. The Court’s language

was unambiguous:

“We think this case is uted by the principle

announced in the Ryan case. The warranty which

a stevedore owes when he goes aboard a vessel to-

perform services is plainly for the benefit of the

vessel whether the vessel’s owners are parties to thie

contract or not. That is enough to bring the vessel

into the zone of modern !aw that recognizes rights in

third-party beneficiaries. Restatement, Law of Con-

tracts, § 133. Moreover, as we said in the Ryani case,

‘competency and safety of stowage are inescapable

. elements of the service undertaken.’ 350 U. S., at

133. They are part of the steyedore’s ‘warranty of

.workmanlike service that is comparable to a manu-

facturer’s warranty of the soundness of its manufac-

tured product.’ /d., at 133-134. See MacPherson

v. Buick Motor Co., 217 N. Y. 382. 111 N.E. 1050.

“We conelide thai ‘sirlee the’ negligence of the

stevedores, which brought the unseaworthiness of the

4 WATERMAN 8 DU GAN & McNAMARA. ,

| vessel into iin. amounted to a breach of the war- -

ranty of: workmanlike service, the vessel may recover

over.” 358 U.'S. 428-429.

This reasoning. is applicable here. We can. perceive no

difference in principle, so far as the stevedore’s duty to

indemnify the shipowner is concerned, whether the stéeve-

dore is engaged by an operator to whom the owner has ©

chartered the vessel or by the consignee of the cargo. |

Nor can there be any significant distinction in this respect

whether the longshoreman’s original claim was asserted

in am in rem or an in personam proceeding. In the Ryan

and Weyerhueuser cases in personam liability was as-

serted. In the Crumady case the injured stevedore had

brought an in rem proceeding. The ship and its owner -

are equally liable fér.a breach by the contractor of the

owner’s nondelegable duty to provide a seaworthy vessel.

The Osceola; 189 U. S. 158, 175; ef: Continental Grain

Co. v.. Barge FBL-6586, 364 U.S. 19. The owner, no less

than the ship, is the beneficiary of the stevedore’ s breach

of warranty of workmanlike service.

Accordingly the ‘judgment of the Court of Appeals is

reversed, and the case is remanded to the District Court

. for further eed consistent with this opinion.

* Penman and remanded.

8