Respondents Brief — Guzman v. Pichirilo

8 Table of Contents.

Opinions below

Statement of the case

Questions presented

Summary of argument

Argument

I. The Court of Appeals properly reversed the

Trial Court's ruling that the evidence was in-

sufficient to permit a finding of demise, because

the only evidence on the point wholly supported

_ that finding, and this evidence was neither in-

credible nor controverted

II. The owner of a vessel which is in the posses-

sion and control of a demisee is not liable in

personam for injuries caused by an unsea-

worthy condition created after the demise and

while the vessel was in the demisee’s posses-

sion and control

III. The Carib was not liable in rem to peti-

tioner, because, as a longshoreman employed

by her demisee, he was entitled only to fompen-

sation and because the unseaworthiness arose

after the demise

A. Liability of the demisee during whose con-

trol, operation and management the unsea-

worthy condition arose was limited to the

payments made under the Workmen’s Ac-

cident Compensation Act of Puerto Rico

B. When the owner is not liable in persouam,

and liability of the demisee has been validly

limited and (as limited) satisfied, the vessel

is not liable in rem

„ My

* te wo —

10

10

11

— — 1

ii „ TABLE OF AUTHORITIES CITED

—

IV. The bond to release bes Carib from arrest 24

Conclusion 25

Table of Authorities Cited.

Cass.

_Barnstable, The, 181 U.S. 464 —

Bennett v. The Mormacteal, 160 F. Supp. 840; affd.

per curiam, 254 F. 2d 138; cert. denied, 358 U.S.

817 i 17, 18%., 20, 21

Cannella v. Lykes Bros. S. S. Co., 174 F. 2d 794 oe

China, The, 74 U.S. (7 Wall.) 53 11., 16

City of Norwich, The, 118 U.S. 468 14, 17

Consumers Import Co. v. Kabushiki Kaisha Kawa-

saki Zosenjo, 320 U.S. 249 14, 17

Continental Grain Co. v. Barge FBL-585, 364 U.S. 19 13

Crumady v., The Joachim Hendrik Fisser, 358 U.S.

423 8,9, 22, 23

Eugene F. Moran, The, 212 U.S. 466 12, 16m.

Grillea v. United States, 229 F. 2d 687 7u., 8, 18, 19

Grillea v. United States, 232 F. 2d 919. 19, 22, 23, 24

Homer Ramsdell Transportation Co. v. La Com-

pagnie Générale Transatlantique, 182 U.S. 406° 16

J. K. Welding Co., Inc., v. Gotham Marine Corp., 47

F. 2d 332 r 24

Leary v. United States, 14 Wall. 607 9

Leotta v. The Esparta, 188 F. Supp. 168 22, 23, 24

Little Charles, The, 26 Fed. Cas. 979 (No. 15,612) 15, 16

McAllister v. United States, 348 U.S. 19 4,5

Muscelli v. Frederick Starr Contracting Co., 296

N.Y. 330 9

8

TABLE OF AUTHORITIES CITED tits iii

Noel v. Isbrandtsen Co., 287 F. 2d 833 21

Palmyra, The, 25 U.S. (12 Wheat.) 1 ; 15

Pedersen v. Tanker Bulklube, 170 F. Supp. 462;

affd. per curiam, 274 F. 2d 824; cert. denied, 364

U.S. 814 2 . 20, 21

Queen of the Pacific, 180 U.S. 49 g 5 16

Reed v. Te Yaka, 183 F. Supp. (9 22. 23,24

Reed v. United States, 78 U.S. (11 Wall.) 591 7

Samuels v. Munson S. S. Line, Inc., 63 F. 2d 861 17

Seas Shipping Co., Inc., v. Sieracki, 328 U.S. 85 8

Smith v. The Mormacdale, 198 F. 2d 849; cert. de-

nied, 345 U.S. 908 17

United States v. Ames, 99 U.S. 35 — 7

United States v. The Malek Adhel, 43 U.S. (2 How.)

210 15

United States v. Shea, 152 U.S. 178 Au., 7n.

_ Vitozi v. Balboa Shipping Co., 163 F. 2d 286 8

Vitozi v. S.S. Platano, 1950 A. M. C. 1686 19n.

Waterman Steamship Corp. v. Dugan & McNamara,

Inc., 364 U.S. 421 9n.

Western Maid, The, 257 U.S. 419 12, 18

Willie, The, 231 Fed. $65 E

Srarurzs Etc.

19 U.S.C. § 1703 ; 16

28 U.S.C. § 1404(a) 3 14

Longshoremen's and Harbor Workers’ Compensa-

tion Act, 33 U. & C. §§ 901-950 17, 19, 20

46 U.S.C. $§ 181-191 15

iv rain or AUTHORITIES CITED

Suits in Admiralty Act (46 U.S.C. §§ 741-752) 19

49 U.S.C. § 782 16

| 9

Workmen's Aceident Compensation Act of Puerto

Rico (11 L. P. R. A. §§ 1-42, 1955) sek

Federal Rules of Civil Procedure, Rule 52(a) 4,5

MiscELLANEovs.

Gilmore & Black, The Law of Admiralty, 218 (1957) 10

Holmes, The Common Law 26-27, 28 ( 1881) 12, 13

Robinsog, Admiralty,, 592-598 (1939) 4n.

Scrutton, Charterparties, 4-9 (16th ed. 1955) In.

>

Supreme Court of the United States.

Ocroser Term, 1961. 3

No. 358.

LAURFANO MAT SON ET GUZMAN,

Petitioner,

V.

RAMON RUIZ PICHIRILO,

Respondent.

BRIEF FOR RESPONDENT.

Opinions Below.

Respondent adds to pétitioner’s statement that the

opinion of the Court of Appeals is also reported at .1961

A.M.C. 1588. 4

Statement of the Case.

Respondent adds to petitioner’s Statement of the Case

the following:

The shackle which broke was a ‘‘new’’ shackle (R. 10)

recently bought (R. 23; 290 F. 2d 813).

Bordas & Co., petitioner’s employer, had compensation

coverage in the State Insurance Fund (R. 3, 9) under the

Workmen's Aceident Compensation Act of Puerto Rico

(11 L.P.R.A. §§ 1-42, 1955) (Petitioner’s Brief 14).

2

2

When respondent filed claim to the vessel in the form of

a motion (R. 4-5) he filed with ben in the amount of

_ $20,000 for discharge of the C from arrest (R. 5-6).

The motion was consented to and the discharge was or-

dered by the District Judge (R. 5).

We do not agree with petitioner (Brief 3) that the

Cann s master described Bordas & Co., the demisee, as a

third Party (R. 10.11). oe

The Court of Appeals reversed the District Court upon

the incorrectness of the following ruling (R. 19):

„The evidence is so meagre in this respect that I

can find no lawful basis for holding that the vessel

was under a demise charter to Bordas & Co.

Questions Presented.

Respondent does not agree with the -second question as

stated by the petitioner (Brief 6). We think the question

is: 9

Does the Court of Appeals have the power to re-

verse an incorrect ruling of law, viz., that the evidence

was insufficient to permit a finding, and then itself,

on undisputed, unimpeached testimony, make the

proper finding?

Summary of Argumeat.

The first question presented by petitioner (Brief 5) is

whether a vessel in the possession and control of a demise

charterer is liable in rem for injuries to-a longshoreman

under the*circumstances presented by the record. The

District Court found that respondent was ‘‘the owner in

additional recovery should net be exacted by way of the

ship. A ship is not s person; it is but a special kind of

property, as this Court has held in various contexts.

to :

4

from arrest. This contention was not reached in the Court

below. It remains to be passed upon if in rem liability is

sustained.

“=

ree

I. Tue Cover or Apress reren eevensep rar Tua!

Conte BULING THAT THE SVYIDENCE Was INSUFFICIENT TO

PERMIT 4 FINDING OF DEMISE, BECAUSE THE ORLY BVIDENCE

on THE POINT WHOLLY SUPPORTED THaT FIKDING, AND tun

BVBENCE W46 NEITHER INCREDIBLZ NOR CONTROVERTED.

: The decision of the Court of Appeals depends upon a

helding that the Camm was demised by respondent to

Bordas & C., petitioner's employer. The District Court

ruled against the defense based on the demise (R. 19)

because it found that the respondent was ‘‘the owner. in

vessel exclusively available for the use of the charterer. in a voy-

of Civil Procedure: Findings of fact shall not be set aside

unless clearly erroneous, and due regard shall be given

to the opportunity of the trial court to judge of the credi-

bility of the witnesses.’’

Here, of course, the Trial Court did make a finding that

respondent Pichirilo was the owner in possession and con-

trol of the vessel. This finding, however, was based upon

the statement in the Trial Court s opinion that the evi-

dence is so meagre in this respeet that I can find no law-

ful basis fer helding that the vessel was under a demise

charter to Bordas Co.“ (R. 19). The Trial Court’s rul -

ing was thus equivalent to u directed verdict on this point

in a jery-tried ence.

Apart from the evidence of Jose Lora, master of the

Rules of Civil Procedure. oY:

Petitioner insists that the ict Judge felt that the >

testimony of Bordas was incredible, an argument based

Ji ²ĩ˙—X nee Sney

(BR. 17)

.8

: Mr. Rodriguez: ... The operator is Bordas

and Company.

The Court: That may be what you think, but I

don’t believe that Bordas is the operator of the boat.“

This is, of epurse, a statement, not of unwillingness to be-

lieve the testimony of Bordas, but of unwillingness to

draw a given conclusion from that testimony.

Bordas testified that his company had been operating

the Cann for around five years and that he paid the re-

spondent $200 a month. In addition, he paid all the ex-

penses of the boat. “I mean paying the payrolls, the cap-

tain 's salary, all the payrolls of the vessel, the food of

the crew, the fuel, the maintenance, the repair, the dry

docking, the insurance, the port charges, and all the ex-

peuses that go with the operation of a vessel“ (R. 13).

In addition, Bordas said that in the ‘‘usual’’ charter party,

plainly referring to a time or voyage charter, ‘‘the only

thing that the charterer par port charges and fuel for

the igtended voyages (R. 15). Aud be continued: But

in this case it is a kind of charter, because it does not com-

ply with the regular provisions of a charter party. I pay

the seamen, food, repair, maintenance, drydecking; which

in a regular charter party are exciuded’’ (R. 15). Mr.

Bordas was clearly distinguishing between a demise,

wherein the charterer pays all of the expenses and the

charter hire, and a time or voyage charter, wherein the

charterer pays only for port charges and fi (plus, of .

course, the charter hire).

Petitioner complains (Brief 20) that the testimony does

not disclose the details of the charter, as, for example,

date of commencement, date of termination and conditions

of default. We point out that there was no cross-exam-

ination of the witness to develop any of the things abvut

7 8 55

which petitioner complains. Petitioner also says (Brief

20) that there is no evidence of responsibility for surveys

and repairs or for insurance, but the above-quoted testi-

mony of Bordas makes it plain that the charterer paid

for those things, as well as all of the expenses that go

with the operation of a vessel.

Since the testimony of Bordas was inherently credible,

was not found to be incredible by the Trial Judge and

indeed was relied upon by him in his opinion (R. 19),

though incorreetly quoted (R. 23, 290 F. 2d, at 813) the

Court of Appeals properly and fully correeted the judge’s

error of law.“

Reed v. United States, 78 U.S. (11 Wall.) 591, 601 (1870),

makes the test of a demise ‘‘possession, command, and

navigation.’’ The words of the witness Bordas, con-

trolling, operating and managing the vessel“ (R. 16), with

a master under his orders (R. 15), meet the test of Reed

v. United States.

Petitioner asks (Brief 21) what ends have been accom-

plished by the transfer of the vessel, and answers this:

None, exeept to destroy the right and lien of the peti-

tioner’’ (Brief 21-22). One purpose, at least, of every

“The fact that the master, Jose Lora, was ‘‘employed”’ by the

respondent does not prevent a demise. He was the orders

of Bordas & Co. (R. 15), and Bordas & Co. was ‘‘controliing, op-

erating and managing the veel (R. 16). Uni States v. Shea,

152 U.8. 178 (1894). Grilles v. United States, 229 F. 24 687, .

690 (2d Cir. 1956): The Willie; 231 865 (2d Cir. 1916).

*

—

II. Tus ou OF A VESSEL WHICH n LX THE POSSESSIOX AND

. CONTROL OF A DEMISEE IS NOT LIABLE IN PERSONAM FOR IX-

JURIES CAUSED BY AN UNSEAWORTHY CONDITION CREATED

AFTER THE DEMISE AND WHILE THE VESSEL WAS IX THE DE-

unn „ POSSESSION AND CONTROL.

This Court has never had squarely to decide the issue

posed by the facts of this case. The Court of Appeals for

the First Circuit has held that an owner who surrenders

all control of his vessel to a demisee is not liable ia per-

__sonam for unseaworthiness, even if such unseaworthiness

pre- existed the demise. Vitozi v. Balboa Shipping Co.,

163 F. 2d 286 (ist Cir. 1947). The First Cireuit recog-

nized in ite opinion in the instant case (R. 24; 290 F. 2d,

at 813-814) that possibly the rule of Vitozi should be lim-

ited to unseaworthiness which arose after the demise.

The doctrine of Vitozi as thus modified accords with the

position of the Second Circuit, which held in Cannella v.

Lies Bros. S. Co., 174 F. 2d 794 (2d Cir. 1949), that

the owner would be liable to an injured longshoreman only

for that unseaworthiness existing at the time of the de-

mise. In the first Grillea decision (Grillea v. United States,

229 F. 2d 687 (2d Cir. 1956)), the Second Circuit held that

the owner of a vessel was not liable to an injured long-

shoroman for unseaworthiness arising while a demisee

was operating the vessel.

We urge that the principle underlying these decisions

fully accords with the mandate of this Court in Scas Ship-

ping Co., Inc., v. Sieracki, 328 UB. 85 (1966), that an

owner owes a longshoreman a non-delegable duty to pro-

vide a seaworthy vessel.

This Court has never held that the owner's non-delegable

duty of seaworthiness covers an unseaworthy condition —

the possession of an owner pro hac vice. The case of Cru-

8

mady v. The Joachim Hendrik Fisser, 358 U.S. 423 (1959),

clearly involved a time charter and not a demise. In that

case a circuit breaker cut-off whose faulty adjustment

caused the accident had been adjusted by those acting

for the vessel oer (358 U.S. at 427); the crew mem-

bers, as thie Court recognised, were the owner's servants

_ and not those of the charterer. The libel alleged that the

owners (incorrectly named) operated the vessel through

their agents, servants or employees (article 11 of the

libel, printed at page 9 of the Crumady Record, Nos. 61

and 62, October Term, 1958). The owner claimed the ves-

sel, and in its answer admitted ownership and, in article

11 admitted that it operated the vessel—excepting those

parts turned over to the stevedore and longshoremen

(Crumady Record 12)—thus negating surrender of pos-

session and control to a demisee. Claimant's crose-peti-

tion for writ of certiorari in No. 62 states that the steve-

doring contract was made by the time charterer (pp. 3,

5). There was no issue as to the relative responsibilities

of the general owner vis-d-vis the owner pro hac vice.

322 ey mente tee sana tivo bans

vice, bears during the demise the responsibilities of the

owner. The general owner is not so liable. Leary v.

United States; 14 Wall. 607, 610 (1871). Muscelli v. Fred.

erick Starr Contracting Co., 296 N.Y. 330 (1947).

In general, all in person ‘liabilities arising out

of the ship’s operation are brought home to the de-

mise charterer. It may be of immense economic im-

portance to him that he, as owner, is the warranter of

seaworthiness of the vessel to seamen inctading long

We think the statement of this Court in Warmes }

Corp. v. Dugan 4 McNemera, Inc., 364 US. 423; 426 (1960),

that Crumedy was decided on the premise that the stevedore was

engaged by the party operating the ship under u charter (italics

supplied) was an inadvertence.

—

10

shoremen, who work aboard her, and that he in conse-

quence may be held liable for personal injuries suf-

fered as a result of breach of the absolute duty to

provide a safe place to work and safe implements to

work with.’’ Gilmore & Black, The Law of Admir-

alty, 218 (1957).

See also The Barnstable, 181 U.S. 464 (1901).

To visit in personam responsibility upon the respondent

here would be to undermine and overturn established prin-

ciples spportioning liability under demise charter ar-

rangements.

III. Tue Cann was NOT LIABLE IN REM TO PETITIONER, BE-

CAUSE, 48 A LONGSHOREMAN EMPLOYED BY HER DEMISEE, HE

WAS ENTITLED ONLY TO COMPENSATION AND BECAUSE THE

UNSEAWORTHINESS AROSE AFTER THE DEMISE. (

A. Liability of the demisee during whose control, oper-

ation and management the unseaworthy condition arose

was limited to the payments made under the Workmen’s

Accident Compensation Act of Puerto Rico.

Bordas & Co. was operating the Carm as demisee at the

time of the petitioner’s injury (R. 24; 290 F. 2d, at 813).

As owner pro hac vice it warranted to petitioner that the

vessel was seaworthy. Petitioner was a longshoreman-

employee of Bordas & Co. (R. 23; 290 F. 2d, at 813; Peti- -

tioner’s Brief 3). The Workmen’s Accident Compensa-

tion Act of Puerto Rico (11 L.P.R.A. § 21 (1955), quoted

at Petitioner’s Brief 2-3), provides:

When an employer insures his workmen or em-

ployees in accordance with this chapter, the right

herein established to obtain compensation shall be the

only remedy against the employer

11

The Act unquestionably applies to petitioner (Petition-

er’s Brief 14; R. 9). The demisee had fully satisfied his

statutory obligations to petitioner (R. 3, 9). Thus, the

~ demisee’s only obligation to petitioner was under the Com-

pensation Act.

B. When the owner is not liable in personam, and lia-

bility of the demisee has been validly limited and (as lim-

ited) satisfied, the vessel is not liable in rem.

We have no quarrel with the general proposition, so well

grounded in the admiralty law, that, even though a vessel

is under demise, she may be condemned in rem to satisfy

obligations of the demisee.

Petitioner, however, would have this Court hold that a

vessel may be condemned even where the general owner

is not liable in personam, the demisee is not liable beyond

compensation payments and the vessel was not in control

of a compulsory pilot.“ The petitioner thus asks this

Court to carry the concept of the vessel’s personality to

an extent far beyond the principles enunciated by any

court here or in England. 8

There have, of course, been many cases which refer to

the in rem liability of the ship as a personification of the

vessel, as though she herself were an i ndent actor in

the situation. As discussed by the Court below, the per-

sonification of the vessel is a convenient shorthand method

of expressing legal results, but the characterization is not

a satisfactory basis for achieving them (R. 25; 290 F. 2d,

at 814).

This Court, like others, has 3 the personification the-

ory. At the same time the Court has recognized the fictive

nature of the theory and has freely discarded it when an

"As in The China, 74 U.S. (7 Wall.) 58 (1868).

12

application did not accord with modern ideas of civil re-

sponsibility.

In The Eugene F. Moran, 212 U.S. 466 (1909), Mr. Jus-

| tice Holmes, writing for a unanimous Court, said at page

_/ 474:

„. .. No doubt the fiction that a vessel may be“

a wrongdoer and may be held, although the owners

are not personally responsible on principles of agency

or otherwise, is carried further here than in Eng-

land.. . Possibly the survival of the fiction has

been helped by the convenient security that it

nishes, just as no doubt the responsibility of a mas

for a servant’s torts, that-he has done his best to pre-

vent, has been helped by the feeling that it was desir-

able to have some one who was able to pay.... But

after all a fiction is not a satisfactory, ground for tak-

ing one man’s property to satisfy — man’s

wrong, and it should not be e

And in The Western Maid, 257 US. 419, 433 (1922), he

wrote for the majority:

„It may be said that the persons who actually did

the act complained of may or might be sued and that

the ship for this purpose is regarded as a person.

But that is a fiction not a fact and as a fiction is the

» creation of the It would be a strange thing if

the law created a to accomplish the result sup-

posed. It is totally immaterial that in dealing with

© private . the egies however originated, is in

force.“

We believe it significant that the author of these opin-

ions, whose earlier writings are so often cited in support

of the personification theory (Holmes, The Common Law,

1 5

a —ͤ—ͤ—H

8 13

N

26-27 (1881)), rejected the fiction of personification when

faced with the need to decide actual cases in which its

application would be inconsistent and- illogical. At any

rate, not even in The Common Law did Holmes express

the view that the vessel should be subject to condemnation

. without.pre-existing in personam liability of someone law-

fully and properly responsible for the vessel. He thought

that it was the idea of the ship as security for some per-

son’s liability #hich had helped to keep the personification

theory alive (The Common Law, 28).

Recently this Court, in Continental Grain Co. v. Barge

FBL-585, 364 U.S. 19 (1960), in dealing with the argument

that a single libel against a vessel in rem and her owner in

personam involved two distinct civil actions, commented

thgt that view was based upon ‘‘a long-standing admir-

alty fiction that a vessel may be assumed to be a person

for the purpose of filing a lawsuit and enforcing a judg-

ment (364 U.S., at 22-23, citing Holmes, The 3

Law (1881), 26-27). The Court continued (364 U.S.,

23-24): : : a 8 hee 5

The fiction relied upon has not been without its

critics even in the field it was designed to serve. It

has been referred to as ‘archuic,’ ‘an animistic sur-

vival from ‘remote times,’ ‘irrational’ and ‘atavistic.’

Perhaps this is going too far since the fiction is one

that certainly had real cause for its existence in its

context and in the day and generation in which it was

created. A purpose of the fiction, among others, has

been to allow actions against ships where a person

owning the ship could not be reached, and it can be

very useful for this ol. ...

„This Court has not hesitated in the past to refuse

to apply this same admiralty fiction in a way that

would cut down, as it would here, the scope of con-

14 /

gressional enactments. In fact, Mr. Justice Bradley,

speaking for the Court, said at one time, in constru-

ing a statute which had limited a shipowner’s liability

but had failed to refer to the personal“ liability of

the vessel:

To say that an owner is not ligble, but that his

vessel is liable, seems to us like talking in riddles. A

man’s liability for a demand against him is measured

by the amount of the property that may be taken from

him to satisfy that demand. In the matter of aie,

a man and his property cannot be separated.

The City of Norwich, 118 U.S. 468, 503 [1886].

‘*Fifty-seven years later, this Court was confronted

with a similar argument about another section of the

same statute, and after referring to the analysis in

City of Norwich concluded,

„The riddle after more than half a century re-

peated to us in different context does not appear to us

to have improved with age. Congress has said

that the owner shall not 3 for’’ this loss in ques-

tion. Claimant says this means in effect that he shall

answer only with his ship. But the owner would never

answer for a loss except with his property, since exe-

cution against the body was not at any time in legis-

lative contemplation. There could be no practical

exoneration of the owner that did not at the same

time exempt his property.” Consumers Import Co. v.

Kabushiki Kaisha Kawasaki Zosenjo, 320 U.S. 249,

253-254 [1943].’’

The Court declined to recognize the fiction of personifi-

cation fo defeat transfer of the action to a more convenient

forum under 28 U.S. C. C 1404(a) (1948).

In both The City of Norwich and Consumers Import

Co., supra, — dealt with the Limitation of Liabil-

—

aly

15

‘ity of Shipowners statutes (46 U.S.C. §§ 181-191 (1952)).

The fact that in those cases it was the Congress which

had limited the owner’s liability should, we submit, make

no difference. If, by general principles of law, the de-

© misor of a seaworthy vessel is not personally liable, and

if the demisee’s liability has been statutorily limited, and

if, further, the demisee has met all his statutory obliga-

tions, to persist in saying that the ship may nevertheless

be condemned seems to us, as it has to this Court, ‘‘like

talking in riddles.“ We submit, moreover, that the solu-

tion to the riddle, if any exists, does not emerge from an

examination of cases in which ‘‘personification’’ has ap-

parently been applied.

1. The forfeiture cases do not support the e of

personification to civil actions.

Forfeitures either for violations of an 8 aet

(The Little Charles, 26 Fed. Cas. 979 (No. 15, 612) (C. C. D.

Va. 1818)) or for piracy (The Palmyra, 25 U.S. (12

Wheat.) 1 (1827); United States v. The Malek Adhel, 43

U.S. (2 How.) 210 (1844)) depend upon statutory provi-

sions and the power of Congress to impose forfeiture of a

vessel without regard to the owner’s personal involvement.

Chief Justice Marshall (on circuit) in The Little Charles

and Mr. Justice Story in The Palmyra and The Malek

Adhel both used language of personification which was

perhaps appropriate, since the libels were in admiralty

and the property was in each instance a vessel, but which

was unnecessary at least in the two last-cited cases.* The

same sanctions of forfeiture of the participating or of-

*The Little Charies dealt with a question of evidence and the

Court found it appropriate to use the master’s manifest to sup-

port a condemnation of the vessel even though it might not have

been admissible against the owner in personam. :

—

6— V2

16

fending vehicle are familiar and of long standing in deal-

ing with smuggling, 19 U.S.C. C 1703 (1958), and similar

illegal acts ashore, 49 U.S.C. C 782 (1952). They depend

not at all upon admiralty theories of personification of the

res.

2. The compulsory pilot cases illustrate the outside limit

of personification- in civil cases.

In the compulsory pilot situation the vessel operator is

not liable in personam for the faults of a compulsory pilot,

bechuse there is no agency (Homer Ramsdell Transporta-

tion Co. v. La Compagnie Générale Transatlantique, 182

U.S. 406 (1901)); but the vessel is nevertheless liable in

rem. The China, 74 U.S. (7 Wall.) 53 (1868), is the far:

thest extreme to which “‘personification’’ has boen pressed

in this Court in taking one man’s property to satisfy

another man's wrong, . .. Even in the compulsory

pilotage cases the pilot hinfself is liable for his-own faults.

3. Where bill of lading provisions protect the owner per-

sonally, the ship may not be condémned.

This Court has refused to condemn the ship in rem

where neither the owner nor the party in possession was

personally liable. In Queen: of the Pacific, 180, U.. 49

(1901), the bill of lading required all claims against the

shipowner to be brought within a oertain time. The Court

held that an action in rem after that time could not be

maintained, saying :

The ‘claim’ is in either case against the company,

though the suit may be against its property. 180

US. at 53. (Autbor's italics.) )

Tie Eugene F. Moran, 212 UR. 466, 474 (1909).

17

4. When a statute limits civil liability, the vessel is not

liable in rem.

In The City of Norwich, 118 U.S. 468 (1886), and in

Consumers Import Co. v. Kabushiki Kaisha Kawasaki

Zosenjo, 320 U.S. 249 (1943), where the owner’s liability

was limited by statute, the Court declined to permit action

in rem against the vessel to defeat the limitation which

had been granted to the shipowner.

5. The vessel may not be condemned where the owner is

the stevedore-employer protected by the Longshore-

men’s and Harbor Workers’ Compensation Act.

In at least three cases United States Courts of Appeal

have declined to permit an injured longshoreman to pro-

ceed in rem against the vessel on which he was working

where that veasel was owned by the employer who had com-

plied with the provisions of the Longshoremen’s and Har-

bor Workers’ Compensation Act, 33 U.S.C. 6 901-950

(1952), and whose liability was thus exclusively that pro-

vided by the Act. These cases are Samuels v. Munson S.S.

Line, Inc., 63 F. 2d 861 (Sth Cir. 1933); Smith v. The Mor-

macdale, 198 F. 2d 849 (3d Cir. 1952); cert. denied, 345

U.S. 908 (1953); Bennett v. The Mormacteal, 160 F. Supp.

840 (E. D. N.Y. 1957); affd. per curiam, 254 F. 2d 138 (2d

Cir.) ; cert. denied, 358 U.S, 817 (1958). All of these cases

express the view that to permit condemnation of the vessel

in rem at the suit of the owner s ployee

would deprive the shipowner of the limited li pro-

sided if Sie hat, dase 0

ship s only an indirect way of collecting those damages

from the owner.

In the instant case application of the teachings of the

‘‘personification * „ decisions is clear.

é

The owner is not liable at all, because the ship was sen-

‘Worthy when delivered to the demisee. The demisee, hav-

ing made his compensation payments, is not further liable.

Should petitioner nevertheless be permitted an additional

recovery from the ship as a res, the loss will »

tall upon the owner, a party who was not at all in

personem, or upon one whose in personam liability has

been limited and satisfied by « validly applicable Compen-

sation Act (the demisee-employer ).

If it be said that the general owner, by letting his vessel

into the stream of comnierce by demise, has voluntarily

risked the value of the vessel as his stake in the enterprise

and subjected her to respond to whatever claims may arise

against ber, we submit that he exposes it only to valid

claims against the demisee, limited in amount to no more

than the demisee might be called upon to respond to in

perso. In The Western Maid, 257 U.S. 419 (1922), .

two of the vessels were demised to the United States

and were in the possession of the United Siates when

the acts occurred which as to a private party would

otherwise have been torts. - Yet, even as to those vessels, —

this Court refused to permit in rem responsibility after

they had been returned to their general owners. The sov-

__erulgn tmmanity which protested thy vessel omned ‘by. the .

United States extended also, the Court held, to vessels

demised to it. The principle is plainly applicable to the

instant ease: the demisee’s quasi-immanity under the

- Compensation Act extended to the demised vessel.

In the light of the legal background discussed above,”

the Second Cireuit held in the first Grilles decision (Gril-

lea v nited States, 229 F. 2d 687 (2d Cir. 1956)) that a

owner was pot liable to a longshoreman for injury |

ae The Mormecteal, 160 F. Supp. 840 (B.D.

N.Y. 1957) ; affd. per curiem 254 F. 2d 138 (2d Cir.), cert. denied

356 U.S. 817 (1958), which was not yet decided.

4

resulting from an unseaworthy condition which arose after

the vessel had been demised. The suit was brought under

the Suits in Admiralty Act (46 U.S.C. §§ 741-752 (1952))

aud in rem jurisdiction was denied because the Court felt

that the libelant had not elected to proceed on principles

of libels ſ rem (46 U.S.C. § 743 (1962)).

On ring, in the second Grillca decision (Grillea v.

United States, 232 F. 2d 919 (2d Cir. 1956)), the Court was

persuaded that an election sufficient to proceed as though

in rem had been made. In a two-to-one decision the Court

held that, although neither the United States (shipowner )

nor any jural person was liable in personam (the employer-

demisee being liable only for compensation under the Long-

shoremen 's and Harbor Workers’ Compensation Act, 33

U.S.C. 55 901-950 (1952)), liability on principles of libels

in rem did exist. FFF

e se Ra

has never come up in the books, although, as res

integra, we see no reason why a person’s property

eee Qannt be See Sees Se ee eee er

liable ‘in personam’.’’* |

4

At the close of his opinion Judge Hand referred to an

indemnity clause in the charter. He apparently felt that

the existence of such a clause justified the result reached.

Several Courts have commented upon the significance, or

lack of it, of the indemnity clause in the charter involved

in Grilles. In any event, the Second Circuit, despite the

second Grillea opinion, now declines to permit im rem lia-

enn is this principle in Grillea which the First Circuit labeled

„novel (R. 27; 290 F. 2d, at 815), not the principle of in rem

liability for unseaworthiness in a ptoper case. See also Vitor v.

8.8. Plateno, 1950 A. M. C. 1686 (8. D. N.Y. 1948) (not officially

reported). {

7

A

bility of the vessel to an injured person where there was no

is pero liability of anyone not covered by a compensa.

tion statute. Bennett v. The Mormacteal, 160 F. Supp.

840 (E. D. N.Y. 1967); affd. per curiam, 254 F. 2d 138 (2d

Cir.); cert. denied, 358 U.S.\817 (1958). Pedersen v.

Tester Bulkiube, 170 F. Supp. 462 (E-D. N.Y. 1959); and.

r ); cert. denied, 364 U.S.

814 (1960).

In the Pedersen case an employee of Todd Shipyards

Corporation was injured upon the collapse of a staging

welded high up on the inside of the Butaiusz, when the

bracket supporting one end of the staging collapsed be-

cause improperly constructed. At the time of the injury

the Belles was withdrawn from commerce and under-

going extensive repairs at Todd Shipyards Corporation,

which controlled the vessel. Pedersen libeled the Buix-

Luss. National Bulk Carriers claimed the vessel as owner

and defended in her behalf. Pedersen made no claim

grounded upon a warranty of seaworthiness, because the

vessel was withdrawn from commerce and undergoing ei-

- tensive internal repairs. The cause of action was based

upon the veseel’s liability in rem resulting from the failure

of National Bulk Carriers to provide a safe place to work

and upon the liability of the vessel herself to libelant as a

business guest for the tort of anyone in lawful possession.

The Court held that, in the absence of a warranty of sea-

worthiness, the duty to supply a safe place to work was

no more than a duty to use due care in that direction; and

that, since the vessel was completely in the control of

Todd, National Bulk Carriers could not be held for failure

0 furnish a safe place to work. There was consequently

no lien arising from the breach of that claimed duty. The

Court also beld that the 1 was not liable in rem for

the negligence of Todd, had the lawful control but

whose liability was cireumscribed by the Longshoremen’s

1

—— 2 2 A l ee ta

eet

21

and Harbor Workers’ Compensation Act. After pointing

out that in Bennett v. The Mormacteal, 160 F. Supp. 840

(E.D. N.Y. 1957; affd. on opinion below, 254 F. 2d 138 _

(2d Cir. 1968) ; cert. denied, 358 U.S. 817 (1958)), the ves-

sel was not liable is rem to a longshoreman-employee of

menu

tion Act, the Court said:

In any event, it would be strange logic to hold that °

a vessel, owned by one who might be otherwise liable

in tort but who is within the protection of the Com-

pensation Act, cannot_be reached in a proceeding

in rem, and at the same time to hold, as libellant urges

here, that a vessel owned by a wholly innocent third

party can be held liable where, as here, there is no

contract of indemnity, and the negligence causing the

injury is solely attributable to the employer protected

by the Compensation Act.“

In Noel v. Isbrandt'sen Co., 287 F. 2d 783 (4th Cir. 1961),

the ship Waun Bevan was owned by the United States

and demised to Isbrandtsen Company. A surveyor, e- —

gaged by Isbrandtsen Company to represent its interest

in an off-hire survey, was injured when a batten clip on

the side of the vessel, which the surveyor was using as a

hand-hold, broke because defective. The libelant sought

recovery against the United States as owner and Isbrandt- _

sen Company as charterer on grounds of negligence and ——

on grounds of unseaworthiness, and also sought recourse

against the vessel on the theory of the ship’s responsibility

to libelant for the injury (apart from her own unseaworthi-

ness or the negligence of any person). Here again, as in

Pedersen, supra, the issue of personification was —.

in the case. ©

eee „„

—

It was held that there was no sufficient evidence of neg-

ligen, because inspection would probably not have dis-

closed the defect. It was likewise held that there could

be ne warranty of seaworthiness, since the vessel was

completely withdrawn from commerce, was a dead ship

and was well advanced in preparations for laying up. The

Court then held that the ship should not be held in rem

**as an absolute insurer for personal injury where there

has been no violation of any warranty of seaworthiness

and it is not established that anyone connected with her

has been at fault.

Two District ( cases, both decided in 1960, have

achieved the t of the second Grillea opinion. They

are Reed v. The Yaka, 183 F. Supp. 69 (E.D. Pa. 1960),°

and Leotta v, The Esparta, 188 F. Supp. 168 (S. D. N.Y.

1960). / ;

In Reed v. The Yaka thé vessel was demised (under a

charter including an indemnity clause) to the longshore-

man's employer. The Court found that the longshoreman

was injured by unseaworthiness arising after the demise,

and that the indemnity clause was not controlling. The

opinion holds the characterization of the demisee as owner

pro hac vice to be of no great significance. The Court

apparently felt that, because the owner was going to get

the ship back at some future time, the action ig rem was

really as much Agaiiist the owner, who was not

by the ion Act, as it was against the i

stevedore, who was so protected. That discussion begs the

question, for in Reed, as here, the general owner out of

possession was not responsible in personam for unsea-

worthiness arising after the demise. In Reed the District

Court cited Crumady v. The Joachim Hendrik Fisser, 358

U.S. 423 (1959), as authority for the statement that—

*Reed v. The Yoke is presently on appeal in the Third Cireuit

(Nos. 13,600 and 13,601) and was argued on December 18, 1961.

7 fe

—

* \

Le a, |

„„The law is settled that where a stevedore [long-

shoreman] is injured as a result of unseaworthiness

' which arose after the real owner surrendered control

to a vuareboat charterer who is not the stevedere's

llongshoreman e] employer, the stevedore [longshere-

man] can still recover in an actién in rem againet

the ship.”’

Soy

As we have already discussed (supra, pp. 8-9), Crumady

did not involve a demise. The charter was a time charter

and the owner remained responsible for unseaworthiness

at the time of Crumady’s injury...

In Leotta v. The Esparta the injured lougshoreman N

beled the Espanta in rem and her owner and demisce in

personem. -Libelant was employed by the demisee, which

did its own stevedoring. The owner was not served and

did not appear. The case came up on exceptions by the

Espanta and the demisee on the ground that the demisee's

liability wa limited by the Longshoremen’s and Harber

Workers Compensation Act and that recovery against

the. ship would be a violation of that limited liability. It

was assumed that the unseaworthiness complained of

arose after the demise. The Court followed the second

Grillea case and Reed v. The Yaka. It appears to have

ignored the proposition that the general owner would not

be liable at all in personam; for it enid: a

„The demisee is owner pro hae vice but only pro

hac vice. The shipowner is always there in the back-

ground. If the longshoreman is given a lien on the

chip for damage caused by its unseaworthiness, even

“though that unseaworthiness arises after the demise,

that lien will burden the interest of the owner as well

as the interest of the demisee-. (188 F. Supp. at

169.)

24

Here again the Court evades the issue, which is whether

the longshoreman can validly proceed against property

of an owner who would not be liable in personam. That

was the real issue in Leotta as it was in Reed v. The Yaka.

Merely to say that the lien exists is, we submit, not enough.

The principles of in rem liability as Vnunciated by this

Court for almost a century join with the clear wording of

a valid statute to compel a disavowal of second Grillea’s

unfortunate language and the confusion it has spawned.

The owner is not liable in personam ; the demisee has seen

to his compensation payments, his exclusive liability; the

vessel is not subject to suit.

IV. Tue vob To netease M/V Cane FROM ARREST.

It will be noted that, because of its conclusion that the

judgment of the District’ Court should be vacated, the

Court of Appeals did not reach contentions of the respon-

dent other than those discussed in the opinion below (R.

27 290 F. 2d, at 816). One of the contentions not reached

concerned the effect of the bond given to release the vessel.

Respondent filed claim to the vessel in the form of a mo-

tion (F. 45). He filed with the motion a bond in the

amount of $20,000 for discharge of the Canis from arrest

(R. 5-6). The motion was consented to and the discharge

was ordered by the District Judge (R. 5).

In his capacity as claimant of the Canim, respondent

argued below that, if the Cam were subjected to in rem

liability to the petitioner, that liability could not exceed

$20,000, the amount of the bond or stipulation for value,

which takes the place of the res for all subsequent pur-

poses. This matter was fully discussed by Jude Woolsey

in the Southern District of New York in J. K. Welding

Co., Inc., v. Gotham Marine Corp., 47 F. 2d 332 (S. D.

*

25

N.Y. 1931). See also United States v. Ames, 99 US.

35, 41 (1878).

No question is before this Court on the instant writ of

certiorari as to the quantum of in rem liability. The Dis-

trict Judge decreed that petitioner recover from the Cann

and the personal respondent the sum of $30,000, together

with interest, costs and disbursements to be taxed (B. 21-

22). If this Court decides that there is in rem liability,

the decree of the District Judge, so far as it affects the ship

in rem, cannot be reinstated without a decision on this

question.

Conclusion.

Respondent submits that the judgment of the Court of

Appeals vacating the judgment of the District Court and

remanding the cause for entry of judgment of dismissal

should be affirmed... In the event that/this Court decides

that in rem liability of thé Canm exists, the cause should

be remanded to the Court of Appeals for determination

af the amount of that liability.

Respectfully submitted,

SEYMOUR P. EDGERTON,

One Federal Street,

Boston 10, Massachusetts,

Proctor for Respondent.

Huuze B. Zoset, 4

Rosert J. HALLIASEx,

Isauss Ropricvez Monkxo,

Of Counsel.