BLACK DIAMOND S.S. V. STEWART & SONS, LTD., 336 U. S. 386 (1949)

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U.S. Supreme Court

Black Diamond S.S. v. Stewart & Sons, Ltd., 336 U.S. 386 (1949)

Black Diamond Steamship Corp. v. Robert Stewart & Sons, Ltd.

No. 121

Argued January 3-4, 1949

Decided March 14, 1949*

336 U.S. 386


A vessel owned by the United States and chartered under a bareboat charter to an American corporation collided with a British vessel in territorial waters of Belgium. The British vessel sank with all of her cargo; her chief steward was killed, and the American vessel damaged the bank of the river. Owners of the British vessel sued the charterer of the American vessel in England, claiming damages of $1,000,000. Owners of the cargo of the British vessel sued the United States and the charterer of the American vessel in a federal district court for claims aggregating nearly $1,000,000. Alleging that the value of the American vessel was about $1,000,000, that the total claims would exceed that amount, and that their liability under Belgian law was limited to $325,000, the United States and the charterer petitioned the District Court for limitation of liability under R.S. § 4285, as amended, 46 U.S.C. § 185. The United States posted no bond, and the charterer posted a bond of only $325,000. The District Court dismissed the petition, and the Court of Appeals affirmed.

Held: the District Court should not have dismissed the petition, but should have required the charterer (but not the United States) to post a bond of $1,000,000, to guard against the possibility that American law, and not Belgian law, might be found to control the amount of liability. Pp. 336 U. S. 388-399. chanrobles.com-red

Page 336 U. S. 387

1. R.S. § 4285 is applicable because the total amount of potential claims exceeds the fund available for their satisfaction, whether that fund be measured by the law of Belgium or of the United States. Pp. 336 U. S. 393-394

2. Under 28 U.S.C. § 2408 and 46 U.S.C. § 743, the United States is not required to post a bond in a proceeding under R.S. § 4285. P. 336 U. S. 394.

3. In view of the six-month limitation on proceedings under R.S. § 4285, the Court of Appeals, instead of affirming the dismissal, should have remanded the case to the District Court in order to give the charterer an opportunity to file a larger bond, since the defect was not jurisdictional. P. 336 U. S. 395.

4. If the Belgian law is not merely procedural, but attaches to the right of recovery, and if it does not conflict with any overriding domestic policy, it is applicable in this case. Pp. 336 U. S. 395-396.

5. The Belgian law having been pleaded, it must be proved as a fact, even though it is derived from the Brussels Convention of August 25, 1924, limiting the liability of owners of seagoing vessels. Pp. 336 U. S. 396-397.

6. Upon remand, the question of what law governs the substantive limit of liability should be determined in advance of the proof of individual claims. Pp. 336 U. S. 397-398.

7. If Belgian law is found to control, a $325,000 bond would suffice, but if American law is found to control, a $1,000,000 bond would be required. P. 336 U. S. 398.

8. The District Court, in the exercise of its power to preserve the status quo pending appeal, should require the charterer to post a bond for the value of the ship and freight. Pp. 336 U. S. 398-399.

167 F.2d 308, reversed.

A federal district court dismissed a petition of the United States and the charterer of one of its vessels for limitation of liability under R.S. § 4285, as amended, 46 U.S.C. § 185. The Court of Appeals affirmed. 167 F.2d 308. This Court granted certiorari. 335 U.S. 809. Reversed and remanded, p. 336 U. S. 399. chanrobles.com-red

Page 336 U. S. 388