US SUPREME COURT DECISIONS

In a case of collision occasioned by the negligence of the officers or hands of one of the vessels, without any neglect, privity, or knowledge of her owner, and where said vessel took fire and sank with loss of cargo, and never completed her voyage nor earned any freight, but was afterwards raised and repaired, and was then libeled and seized on behalf of the owners of her cargo, and claimed and bonded at her then value by her owner, who filed an answer and a petition for limited liability, and where it further appeared that the owner received certain moneys for insurance of the ship against loss by fire, held:

(1) That the owner was entitled to a limitation of liability to the value of his interest in ship and freight under the act of 1851. Sections 4282-4287 Rev.Stat.

(2) That the point of time at which the amount or value of the owner's interest in ship and freight is to be taken for fixing his liability is the termination of the voyage on which the loss or damage occurs.

(3) That if the ship is lost at sea or the voyage be otherwise broken up before arriving at her port of destination, the voyage is then terminated for the purpose of fixing the owner's liability.

(4) That in the present case, the voyage was terminated when the ship had sunk, and that her value at that time was the limit of the owner's liability, and that the subsequent raising of the wreck and repair of the ship, giving her an increased value, had nothing to do with the liability of the owner.

(5) That no freight except what is earned is to be estimated in fixing the amount of the owner's liability.

(6) That insurance is no part of the owner's interest in the ship or freight within the meaning of the law, and does not enter into the amount for which the owner is held liable.

(7) That the limitation of liability is applicable to proceedings in rem against the ship as well as to proceedings in personam against the owner; the limitation extends to the owner's property as well as to his person.

(8) That the right to proceed for a limitation of liability, is not lost or waived by a surrender of the ship to underwriters.

In this case, although an application for limitation of liability had been originally chanrobles.com-red

Page 118 U. S. 469

overruled by the district court, and an interlocutory decree had been rendered in favor of the libellants for their entire damage, with a reference for proofs and a report by the master, yet the court, after the decision of this Court in Norwich Co. v. Wright, 13 Wall. 104, relating to the same collision, and the promulgation of the additional rules adopted by this Court, received a new petition and ordered a new appraisement to ascertain the value of the ship whilst lying sunk, and made a decree limiting the liability of the owner to the value at that time. Held that the district court had jurisdiction to receive such new petition and to take such proceedings.

The case was stated by the Court as follows:

This case arose out of a collision which occurred on Long Island Sound, opposite Huntington, on the 18th of April, 1866, between the steamboat City of Norwich, belonging to the Norwich and New York Transportation Company, the appellees, and the schooner General S. Van Vliet, belonging to William A. Wright and others, appellants, by which the schooner and her cargo were sunk and lost, and the steamboat was set on fire and sunk, and her cargo lost. The owners of the schooner filed a libel in personam in the District Court of the United States for the District of Connecticut against the owners of the steamboat, and obtained a decree for about $20,000 for the schooner, and about $2,000 for her cargo, with interest. Before the decree was passed, the respondents filed a petition stating that proceedings in rem had been commenced against the steamboat in the District Court of the United States for the Eastern District of New York for the recovery of damages for the loss of the cargo on board said steamboat, and they prayed leave to show the whole amount of damages sustained by all parties, and the value of the steamer and her freight then pending, and that the libellants might have a decree for only such proportion of damages sustained by them as the value of steamer and freight bore to the whole amount of damages sustained by all parties by the collision, this claim being made under the Limited Liability Act of 1851. The district court denied the prayer of this petition, holding that it had no jurisdiction to give relief. On appeal to the circuit court, the decree was affirmed and the petition for limitation of liability was denied on the ground that cases of collision were not within the act. The case then chanrobles.com-red

Page 118 U. S. 470

came to this Court, and we held first that the act of 1851 adopted the general maritime law in reference to limited liability, as contradistinguished from the English law measuring the liability by the value of ship and freight after, instead of before, the collision; secondly, that the act embraced cases of damage received by collision as well as cases of injury to the cargo of the offending ship; thirdly, that the district courts of the United States, as courts of admiralty, have jurisdiction to administer the law; fourthly, that the proper court to hear and determine the question is the court which has possession of the fund -- that is, the ship and freight, or the proceeds and value thereof. And in view of the want of rules of procedure and of any uniform practice on the subject, we directed that proceedings should be suspended in the District Court of Connecticut in order to give the respondents an opportunity of making the proper application to the District Court of the Eastern District of New York, which had possession of the steamer, or a stipulation for her value in lieu of the steamer itself. We also adopted some general rules of practice for the aid and guidance of the district courts in such cases. Norwich Co. v. Wright, 13 Wall. 104.

The libel in rem, filed in the District Court for the Eastern District of New York, was filed by George Place and Charles Place (now appellants here), in August, 1866, after the steamboat had been raised and carried to the shore of Long Island, and repaired. The Norwich and New York Transportation Company appeared as claimants, and filed an answer, and a petition to have the benefit of the act of 1851 for a limitation of their liability to the value of the steamboat and freight pending at the time of the collision and fire. Other libels were also filed by other owners of cargo. The steamer as repaired was appraised at $70,000.

On the 13th day of June, 1872, after the decision of this Court was rendered in the case of Norwich Co. v. Wright, 13 Wall. 126, the company, by leave of the court, filed a new petition in the District Court for the Eastern District of New York for the benefit of limited liability under the act of 1851, comformable to the rules adopted by this Court. chanrobles.com-red

Page 118 U. S. 471

The petition stated the various claims against the vessel arising out of the collision (amounting to nearly $150,000), the previous proceedings that had been taken, the libels that had been filed, the circumstances of the loss, the raising and repair of the vessel, etc., and prayed for a new appraisement in accordance with the decision of this Court, a monition to claimants, etc., as will more fully appear in the finding of facts made by the circuit court, hereinafter stated.

Orders for publication and appraisement were made pursuant to the prayer of the petition, and the commissioner appointed to make the appraisement reported as follows, to-wit:

"In ascertaining the value of the steamboat City of Norwich, as directed by the order of reference herein, I have followed what I understood to have been the decision of the Supreme Court of the United States in the case of Wright against the owners of this boat, 13 Wall. 104, and have ascertained her value in the situation and condition she was in after the collision, and before she was raised, and I find from the testimony taken before me that she was at that time of the value of $2,500. I have arrived at such value by taking the testimony as to her value in New York after she was raised by her owners and brought there, which shows that she was then and there worth the sum of $25,000, and I have deducted from that amount the sum of $22,500, being the sum which, according to the testimony, it had actually cost to raise her and bring her to New York, which leaves $2,500 to be her value, as I have above stated."

Exceptions were taken to the report, first that the former appraisement of $70,000 was binding on the parties and the court; secondly that the appraisement should have been for the value of the steamer immediately before the collision; thirdly that it should have been for the value immediately after the collision, before the occurrence of damage by the fire; fourthly that there should have been no deduction for the expenses of raising the steamer; fifthly that the sum of $600 should have been added for the pending freight; sixthly that the money received for insurance on the vessel should have been added, amounting to $49,283.07. chanrobles.com-red

Page 118 U. S. 472

The exceptions were overruled, and a decree was made authorizing the petitioners to pay into court the sum of $2,500, the value of the steamer, and directing a monition to issue, citing all parties interested to appear and prove their claims, restraining the further prosecution of all suits, and appointing a commissioner to take proof of claims. On the subsequent report of the commissioner, a final decree was made in January, 1879, distributing the fund in court and discharging the petitioners from further demands. The case was appealed to the circuit court, and argued before Mr. Justice Strong, who, in October, 1879, affirmed the decree of the district court, but the decree of affirmance was not entered until July 3, 1882. That decree is now before us for review.

The finding of facts by the circuit court is substantially as follows:

1. It states the fact of the collision and that

"it was caused by the negligence of the steamboat's officers or hands, without any design, neglect, privity, or knowledge of her owners. Very soon, within half an hour after the collision, the boat took fire, her deck and upper works were burned off, and she sunk in about twenty fathoms of water. The fire was the direct consequence of the collision, and inseparable from it. It was caused by the rushing of the waters through the broken hull of the boat, whereby the fire was driven out of the furnaces upon the woodwork, and the boat sank by reason of her filling with water."

"2. At the time of the disaster, the boat had a cargo of merchandise on board belonging to different freighters, all of which was totally lost. The freight then pending amounted to $600, but none of it was earned or received by the ship owners."

"3. Sometime after the steamboat was sunk and her cargo destroyed, she was raised by salvors, and taken to the Long Island shore, within the port of New York, where she was repaired."

4. It states the suit by Wright & Co., in the District Court of the United States for the District of Connecticut, and the decision of the supreme court in that case.

5. It states the proceedings upon libel filed by George and chanrobles.com-red

Page 118 U. S. 473

Charles Place in the District Court for the Eastern District of New York, the appraisement at $70,000, and the release of the vessel to the complainants (the Norwich & New York Trans. Co.), upon their giving stipulation therefor, adding:

"The stipulation purported to be for the security not only of the Messrs. Place, but also for the benefit of all persons who might, by due proceedings in said court, show themselves entitled to liens upon the vessel by reason of said collision. The appraisement was of the value of the vessel as it was after she had been raised and repaired. It was returned into the court on the 11th of March, 1867, and the stipulation in the amount of the appraisement was filed on the 29th day of the same month. On the 20th day of December, 1869, the district court ordered decrees to be entered in favor of the libellants in all the suits commenced against the steamer as aforesaid."

"6. Such was the condition of the litigation when the present petition was filed in July, 1872, after the rendition of the judgment by the supreme court in the case of the libel of William A. Wright et al. in the District Court of Connecticut. The petition prayed that, in conformity with the act of Congress, the decision of the Supreme Court, and the admiralty rules made in pursuance thereof, the court would cause an appraisement to be made of the value of the interest of the petitioners in the steamboat, and her freight for the voyage in which she was employed, for which they were liable, and that an order should be made for paying the amount of such valuation into court, or for giving a stipulation therefor, with sureties. It prayed further for a monition against all the persons claiming damages arising out of the said collision and fire, citing them to appear and make proof of their claims, and it prayed also for a restraining order against the further prosecution of all or any suits against the steamboat or the petitioners for any damage caused by the collision, fire, and loss. There was also a prayer for general relief. The monition was issued, the appellants appeared, and an order was made for an appraisement of the amount of value of the interest of the petitioners as owners, respectively, of said steamboat and her freight, pending for the voyage upon which she was employed, for which the petitioners

Page 118 U. S. 474

were liable. A restraining order, as prayed for, was also made. Pursuant to the direction of the court, an appraisement was made. The appraiser ascertained and reported the value of the steamboat as she lay immediately after the collision and fire and before she was raised, to have been $2,500, and the district court confirmed the report, and ordered the amount to be paid into the registry, which was accordingly done."

"7. The value of the interest of the petitioners in the steamboat, as she was immediately after the disaster, was $2,500, and no more."

"8. The value of that interest immediately before the collision was $70,000."

"9. When the collision occurred, the steamboat was insured against fire (not against marine disaster), and upon the several policies the petitioners, as owners, have recovered from the underwriters the sum of $49,283.07; that part of said sum was recovered by the petitioner herein in an action brought by it in the Circuit Court of the United States for the District of Connecticut, on one of said five policies, against the Western Massachusetts Insurance Company. One of the defenses in that action was that the loss and damages were occasioned by the collision (which is the same mentioned in these proceedings), while the petitioner herein claimed that the greater part of the loss was by fire. The court held in that case that there were two classes of losses: one, the damage done the steamer by the collision itself, and the other caused by the fire. The damages caused by the collision were proved at $15,000. The damages caused by the fire were determined to be $69,000. The said insurance company moved for a new trial, but the motion was denied."

"10. The steamboat itself has never been surrendered or transferred to a trustee for the persons injured by her fault."

The conclusions at which Justice Strong arrived upon these facts were 1st, that the value of the steamboat immediately after the collision and fire, as she lay at the bottom of the Sound, with her pending freight, was the measure of the owners' liability, and the amount to be apportioned; 2d, that insurance is not an interest in the vessel within the meaning chanrobles.com-red

Page 118 U. S. 475

of the third section of the act of 1851, or § 4283 of the Revised Statutes; 3d, that the limitation of the owners' liability under the act is as applicable when the proceeding is in rem, as when it is in personam, so that if the owner's liability is only the amount of the vessel's value when at the bottom of the Sound, the vessel's liability, after being raised and repaired, is no greater. chanrobles.com-red

Page 118 U. S. 489