British Transport Commission v. United States – Oral Argument – April 29, 1957 (Part 1)

Media for British Transport Commission v. United States

Audio Transcription for Oral Argument – April 29, 1957 (Part 2) in British Transport Commission v. United States

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Earl Warren:

Number 247, The British Transport Commission, Petitioner, versus United States of America, as Owner of The U.S.N.S. Haiti Victory, et al.

Mr. Acheson.

Dean G. Acheson:

May it please the Court.

This is an admiralty case.

It — it comes before the Court on a limited writ of certiorari for the Court of Appeals for the Fourth Circuit and the limitation of the writ restricts the argument today to a question of admiralty procedure, but the case is not the less important, I hope, because of that.

I think there is eminent authority for the view that legal progress is secreted in the intestacies of legal procedure and it is there that we have to look for it in this case.

The question of procedure, which comes before the Court is a simple one.

It is whether “claimants” in a limitation of liability proceeding may undertake to subject one of their number to liability by proceeding against him under Rule 56 of the Admiralty Rules and this, of course, requires a consideration of the statutes involved and of the Admiralty Rules which are applicable.

Now, briefly, the case comes before the Court in this posture.

The United States as the owner of the Naval Transport, Haiti Victory, which had run in to the British Transport Commission across channel ferry in European waters, ordered its ship to return to the United States.

It did so return.

It entered the port of Norfolk and the United States there brought limitation of liability proceedings to restrict its liability and also to ask for exoneration.

A monition order issued in accordance with the practice and 115 claimants appeared in the Norfolk proceeding.

Of these 115 claimants, 104 were residents of England and the continent.

The American claimants, the 11 American claimants who entered the proceeding, the total amount of their claims was less than one-half of the value of the Haiti Victory and in sufficient sum to support by itself a limitation of liability proceeding.

During before the file, during the course of the proceedings, the sum of the claimants undertook to implead under Rule 56, the British Transport Commission one of the claimants in the proceeding and sought to allege that the British Transport Commission was liable for the accident, and therefore, it should respond in damages.

The District Court rejected this attempt and said that a limitation proceeding did not provide a forum in which claimants might adjust their liabilities to one another.

The United States, in answer to the claim filed by the British Transport Commission, set up a settle alleging that this was under the divided liability law where both ships might be held at fault, so that its damages, which were comparatively small, might be off set against the one-half of the damages which it might be called on to pay, which have incurred to the Haiti Victory.

A trial was held, and at the trial, the Haiti Victory was exonerated from liability and the District Court found that the Duke of York, the British Transport Commission vessel was solely at fault.

All parties appealed to the Court of Appeals.

In the Court of Appeals, the question of fault was affirmed, and this Court has refused to review that finding.

However, on the procedural question, the Court of Appeals reversed the District Court, saying that the precise issue on which it reversed the District Court was whether one claimant in a limitation of liability proceeding could implead, could sue another claimant in that proceeding.

After the decision of the Court of Appeals, the record was remanded to the District Court.

And there, the United States filed what it calls a cross-claim against the British Transport Commission, a claim seeking to set up affirmative liability to the United States on the part of the British Transport Commission.

That matter, a rule of motion to dismiss, has been entered and that is now pending in the District Court.

It is not before this Court.

It is not a part of this appeal.

Though, from the brief of the Government, there seems to be every probability that it will be argued.

The question then comes down to consider Rule 56.

Does Rule 56, by its terms, in the light of its history, in the light of its analysis, does that describe a limitation of liability proceeding?

Dean G. Acheson:

Does it describe as those who can take advantage of Rule 56, co-claimants in the limitation of liability proceeding?

Or to put it in a broader way, which the United States seems to put it, are the rules of procedure in admiralty so amorphous, so vague, that a proceeding started to litigate the liability of the United States and to limit that liability if — if it was found to exist can be turned in to a suit by other parties against another person?

You know admiralty practice, the rule of limitation, statute having to do with the limitation of liability as some 30 years older than the third party practice of Rule 56.

So, we will consider with your Court’s permission, limitation of liability first.

This is a legislative graft upon principles of admiralty.

We hear about limitation of liability first in the French ordinance of 1681.

Half a century later, it crosses the channel and that appears in the statute of seven — George II.

Then, a hundred years went by before it crossed the Atlantic Ocean.

Then, the Steam of Lexington burned at sea with a cargo of gold and as a result of that disaster, Congress in 1851, enacted the limitation of liability statute, which said that the lost of a shipowner on a count of a disaster occurring among other things by collision might be limited if he will not prevail and had no knowledge of the cost of this disaster.

It might be limited to the value of a ship, plus the value of the freight, which was then pending.

The idea, the historic idea of this practice is to limit the risk of the shipowner to what is called the fortunes de mer, the amount which is risk on the voyage shall be the value of the ship and should be separated with the fortune de terre, which is the general assets of the shipowner.

This defense could be setup obviously, when one is proceeded against.

That’s the normal way to do it, but the statute contemplated that there might be affirmative proceedings by which the injured, the shipowner who — whose liability was at stake might take initial action to raise the issue.

And the rules were laid down to that.

It was left entirely to this Court to announce the rules.

And 20 years went by before this Court did that.

Finally, Mr. Justice Bradley, in the case of Norwich Transportation Company versus Wright, announced that the Court had given a thought to a rather confused practice which had grown out and that — on that day, it was announcing the Admiralty Rules which became the procedural guides for limitation of liability proceedings.

Now, these rules are quite simple and they say that the proceeding is initiated by a petition.

The shipowner may file that petition in any district where the ship may be.

If the ship is not in any district, he may file it wherever he is sued.

If he isn’t sued and if the ship isn’t in any district, he may file it wherever he wishes in the United States.

The petition prays for exoneration from liability for the exit.

Or if that be denied for the limitation of liability to the value of the ship and her freights, the petition must setout the value of the ship and her freights, and when the petitioner is someone other than the sovereign, he must file security which forms a fund in the hands of the Court to be divided among the claimants.

The rules provide that a monition shall issue and be published in courts, which are directed by the Court issuing.

In this case, it was published in the Courts of England, the monition of the petition, I suppose to state the parties who have been injured so far as they are known.

And in this case, some 17 people who were mentioned by the United States in its petition as having been killed or injured of whom 13 were residents of England and Europe.

And as part of the procedure, also, an injunction is issued by the Court where the petitioner has been filed enjoining all claimants from proceeding in any other court except that one.

Then, there is a trial on the merits.

And as a result of that trial, the first decision has to do with the question of fault.

If the shipowner is found not to admit its fault, then his security is returned to him and the matter is finished.

Dean G. Acheson:

If however, it is claimed that it’s found that he is at fault, then, the fund in the hands of the Court distributed among the claimants.

Now, Your Honors can see that this is not like an ordinary judicial proceeding.

It’s one that starts backwards.

It’s one which is started by a person who imagines himself to be a defendant.

He initiates the litigation by filing this petition.

And so, Judge Benedict, the leading writer on this subject, describes it as a special proceeding sui generis and indeed, it is.

His purpose was to raise the question of the liability of the shipowner, to bring into that Court all claimants against the ship, to restrict the liability to the value of the ship if he was liable at all, and — and to distribute the assets.

And in further — furtherance of that purpose, for over a century, this Court has given a broad and equitable construction to the Act.

It has described it as a useful but drastic measure, a measure which in the language of Chief Justice Taft brings in against their will all the claimants and prevents them from establishing their claims in any other court.

It’s a very drastic proceeding, but it’s a useful one and for its purposes, it has been generously construed.

But in all the years of the existence of this statute, 106 years, the last third of March, not $1 has ever been recovered by anybody in any Court of the United States against a claimant in the limitation proceeding, not $1.

We will have the occasion later on to examine in it into that and I believe that you’ll find that that is the case.

Earl Warren:

Is that, Mr. Acheson, because the courts didn’t accept jurisdiction in that sense?

Dean G. Acheson:

Well, it’s because in most of the cases, they held that they could not sue.

But in those where they did permit someone to be brought in, they found that the liability was otherwise.

So that what I am saying rather, startling way in — in part to startle my learned friend on my right here is that in all the history of the United States, no one has ever succeeded in recovering a dollar in this proceeding.

Now, if we turn from limitation of liability to Rule 56, you’ll see that this is a wholly different kind of a proceeding.

Rule 56 was thought by the other respondents in this suit and by the two lower courts to be the source of authority if there was any authority for any proceeding against the British Maritime Commission.

It turned on the construction of that rule, the United States thinks not.

The United States thinks this could be done regardless of the rule, but both the lower courts and the other respondents believe the rule to be detached though.

Now, Rule 56 came about as a result of decision of Judge Addison Brown in 1883 in the case of the Hudson, and Judge Brown’s decision has came about by reason of a decision of this Court in the Atlas in 1876.

Now, what this Court decided in the Atlas was that contrary to the law of England, that if a person was libeled, if the shipowner was libeled and found at fault, even though it was found only partly at fault, the libelants could recover from that shipowner the full amount of the damages, and the shipowner was then left to pursue contribution from his joint tortfeasor or feasors.

That became the law of United States because Your Honors said it was and it is different from the law England.

As a result of that, Judge Brown said, “Very well, if this is the law, therefore, if a defendant if in a libel proceeding, the shipowner who is defended, if he claims that another ship was equally at fault,” Judge Brown said, “I will issue an auxiliary writ and bring him in as a defendant into this proceeding, so that he may share the burden of the defense and pay the damages if damages there be.”

And that’s was Rule 56 is.

And as it was originally enacted, it was a rule solely having to do with collision cases later on.It came to other — other cases of injury too, but the original rule is very simple although the language bears out Mr. Justice Frankfurter’s description a moment ago in some statutes which are not wholly illiterate.

On page 15, the statute reads as follows.

“In a suit for damage by collision,” now later on, it was extended beyond that.

“If the claimant of any vessel proceeded against or any respondent proceeded against in personam shall, by petition, are now presented before at the time of answering the libel or within such further time as the Court may allow and containing a suitable allegation shall enfold on negligence in any other vessel contributing to the same collision and the particulars thereof, and that such other vessel or any other party ought to be proceeded against in the same suit for such damage.”

Now, we go back to the word.

Dean G. Acheson:

“If the claimant show — shall, in a play, that process be issued against such vessel or party to that end, such process may be issued.”

Now, what that meant is what I said a moment ago, that if a defendant, somebody who is proceeded against, believes that somebody else ought to be proceeded against as well, he may issue, of course, to have issue an auxiliary writ to bring in that other shipowner as a defendant.

Now, Your Honors will see that this rule is talking and applicable to libel proceedings.

It talks all the way through the rule of the libel.

It says, “At the time when the rule is to be invoked, is before or at the time of answering the libel.

It’s invoked by a defendant who is caused on the Court upon to answer something.

After service, there must be personal service upon the third party to be brought in.

After service, such suit shall proceed as if such vessel or person had been originally proceeded against.

Now, that’s a libel action.

That’s where you originally proceed against them.

And when brought in, this third party shall do what?

The first thing he shall do is to answer the libel.

Rule 56 is a rule which is applicable to libel proceedings and it’s made so by its language and it’s also made so by the inherent nature of the two proceedings.

It is wholly irrelevant to a limitation of liability proceedings what rights claimants may have in to say.

The whole question of the — of the shipowners, the petitioning shipowner’s liability can be settled.

The whole fund in the hands of the Court can be distributed without being destructed in any way by the claims of claimants against one another.

If the libelant conceived that he’s had a claim against the third party, did it assert that claim once the third party has been brought in?

Dean G. Acheson:

If — if the United States had a claim against the British Transport Commission, it can sue the British Transport Commission wherever it can sue the British Transport Commission.

But the whole point of my argument is that coming in as a claimant does not subject oneself to the jurisdiction of the Court for purpose of service as a — of a cross-libel.

Now, the United States as cross-libel is not before Your Honors at this time.

That is pending in the District Court.

What is before Your Honors is an attempt by other claimants to make a defendant out of the British Transport Commission.

But to answer your question, Mr. Justice Harlan, coming in as a claimant does not give that personal appearance in the jurisdiction which will warrant service upon the practice of a cross-libel.

Would the — would the Court have had any jurisdiction at all against the Commission in a direct suit against it?

Dean G. Acheson:

No, sir.

The Court would not have any jurisdiction because the Commission is a British Corporation in England and can of course be sued in England.

Felix Frankfurter:

Supposed the Commission had not come into the limitation proceedings, what would be its position on the basis of its attitude, namely, that the United States Transport was to blame?

Dean G. Acheson:

Well, its position, Your Honor, would have to be on that.

It would have had to sue the United States either in libel in the United States or wait until the Haiti Victory or some other ship owned by the United States went into a British harbor and then attach it and sue it in England.

Felix Frankfurter:

It would not be bound by the limitation of —

Dean G. Acheson:

Not at all.

Felix Frankfurter:

— proceedings of which it was not a party?

Dean G. Acheson:

Not at all, sir, not at all.

If it were an American Corporation, resident in the United States, Your Honor, it would be bound by the injunction so that it could not sue in any other Court.

But if it were in England and not present and not subject to the injunction of the Norfolk Court, then of course it could proceed where it wish to proceed it and could get service.

Felix Frankfurter:

To talk about this being an in rem adjudication is loose talk.

I mean it’s in rem as to limitation.

Dean G. Acheson:

That — that is correct.

Felix Frankfurter:

But not as to claims that you may have against the owner of the ship to which you couldn’t be jurisdictionally be compelled to be a party?

Dean G. Acheson:

That is quite correct, Your Honor.

Hugo L. Black:

If it does terminate the limitation of it, what is the difference as to the issues that can — that ought to be tried and the evidences to be introduced, that kind of proceeding in one word is a direct libel against the ship?

Dean G. Acheson:

If — if the British Corporation came into the United States and filed a direct libel, then, it would be subject to a cross-libel, no question about that.

Hugo L. Black:

What I meant was this.

There are certain issues that have to be tried out in this limitation proceeding where the British Company comes as British associates, whatever it is, comes in and files its claim.

What are the differences in the issues that have to be tried in that proceeding and the issues that have to be tried out if he — if it were to sue the company directly?

Dean G. Acheson:

They are different in this respect, in this respect only, Mr. Justice Black.

The question of fault is before the Court in the limitation proceeding as it would be in a libel proceeding and that issue is fully decided, have now result of the decision as res judicata, that everyone is bound by the finding.

Hugo L. Black:

That —

Dean G. Acheson:

Now —

Hugo L. Black:

— same effect would occur — the suit was between and directed not in the limitation.

Dean G. Acheson:

That is quite correct, Your Honor.

It would.

Hugo L. Black:

Now, what is the difference?

Dean G. Acheson:

Now, the other — the difference is that if this were a libel and cross-libel, then claims against the Haiti Victory could come before the Court, had to be decided.

But those claims cannot come before the Court in a limitation proceeding which was restricted solely to the question of the liability and the limitation of a liability of the petition.

Hugo L. Black:

Well, wouldn’t that — would they do not determine the liability of the United States ship at all in that?

Dean G. Acheson:

Yes, sir, they — the — in the limitation proceeding, they determined the question of fault, everybody’s fault that is determined.

Furthermore, so far as the United States is concern, if it is found not at fault, then there is no further proceeding —

Hugo L. Black:

If it found at fault?

Dean G. Acheson:

Then, the fund, the value of the ship plus the freight, if there were any freight would be divided among the claimants.

Hugo L. Black:

The difference is — is there any more difference than the fact that a Government would get out for less because it has limitation proceedings, that it would — there were direct suits without limitation?

Dean G. Acheson:

The difference is whose liability is being adjudicated.

And in the limitation proceeding, the — that liability is being adjudicated which is petitioned to be adjudicated, i.e., in that of the United States.

In the libel and cross-libel then the liability of both parties that is the damages which they pay is adjudicated.

Felix Frankfurter:

Would it have made any difference — would it make any difference if the British Commission had formally just like a appearing especially could have appeared especially in terms?

I understand your argument is that it doesn’t have to do that, but if in terms as I’ve said, we come into a Court into which we couldn’t be dragged because the Atlantic Ocean separates us from service.

We appear in this Court restrictively for purposes of the limitation where in your view that makes it — have made any difference?

Dean G. Acheson:

Well, we — we believe that is why —

Felix Frankfurter:

I understand that.

Dean G. Acheson:

I don’t believe putting it in words has any particularly sectors of that.

Felix Frankfurter:

If — if — what you say if — if they — if they’re not so limited as a matter of law by the nature of the proceeding, they couldn’t limit themselves by a piece of paper.

Dean G. Acheson:

That’s quite right Your Honor.

The —

Felix Frankfurter:

I suppose.

Dean G. Acheson:

The form of incantation would not have the —

Felix Frankfurter:

Yes.

This is — this would not be a special appearance challenging the jurisdiction.

Dean G. Acheson:

No, Your Honor.

They — they are — clearly, they are tearing for the sole thing which the statute and rules says is involved in the proceeding.

That is, is the United States liable at all?

And if so, who gets what share of the fund in the hands of the Court?

William J. Brennan, Jr.:

Mr. Acheson, did you say that there had been a finding affirmatively that the Duke of York was at fault in this —

Dean G. Acheson:

That was found by the trial court and affirmed by the Court of Appeals.

William J. Brennan, Jr.:

Well, now, would that issue be open that your contention today is correct in a proceeding by one of the co-claimants in England, let’s say, where the Duke of York was found?

Dean G. Acheson:

No, Mr. Justice Brennan.

That is res adjudicata.

That — that issue is closed.

William J. Brennan, Jr.:

Anywhere?

Dean G. Acheson:

Anywhere, anytime at any court.

William J. Brennan, Jr.:

In the manners between the — among the co-claimants?

Dean G. Acheson:

Among all parties who appeared in that proceeding.

They are bound by the judgement of the two lower courts, which this Court would now review, but the United States was not at fault, the Duke or York was at fault.

That is said.

Hugo L. Black:

What would be left for the claimant and the new ship?

Dean G. Acheson:

It’s proceeding to prove their claims, get a judgement for their claims.

Hugo L. Black:

That’s the total — that’s all that would be there?

Dean G. Acheson:

That’s all that is left, yes, Mr. Justice Black.

And let me speak for a moment about that.

William J. Brennan, Jr.:

Well, excuse me a minute.

May I ask you some further question if I may please?

If that’s all that would be left just the judgement for the amount of their claims, in what proceeding will the Duke of York be able to have a limitation of liability in respect to the aggregate of those claims?

Dean G. Acheson:

All right, that — that is a very good question, Your Honor.

I want to wish I was ready to address myself, because under the Government’s claim, I think it looks as though the Duke of York would have no recourse to any limitation.

The Government says, “Probably it would, but it doesn’t know.”

And the reason it doesn’t know is that if this trial takes place in the United States, there was an amendment to the limitation of liability statute in 1946.

And that amendment said that “A proceeding for limitation must be started within six months of the time when a shipowner is notified of the claim.”

Now, you can see it what’s about that, what questions that raise.

The question it raised is, does this apply to a limitation as a defense or only as an aggressive act?

And on that, you will not be surprised to hear that the courts are evenly divided, absolutely evenly on that question.

Half of them say, “The six months limitation applies to everything.

You cannot plead limitation as a defense.

You cannot certify petitioner.”

The other half of the courts say, “It does not apply to pleading as a defense.

It only applies to taking the affirmative step.”

And the only Court of Appeals which has expressed itself on this has said that it applies to both defense and the other.

Now, the Court of Appeals for the Fourth Circuit, in overruling the District Court, I was following out some of the thoughts which are in the minds of Your Honors.

And it felt two — there were two great reasons why this should be done, why should it reverse the District Court.

One was because it said, “There would be grave hardships imposed upon the claimants if it did not do so,” and the other was, “because equitable principles required it to do so.”

Now, these hardships are three in number as stated by the Court.

They are, that if the Court of Norfolk doesn’t decide this, there will have to be another proceeding.

Dean G. Acheson:

Second one is this other proceeding will be at great expense.

The third one is that it will be at a time when perhaps much of the evidence necessary to support their claims would have been lost.

Now, when we examined these, we — we found it a rather confusing situation.

There must be another proceeding in any event.

This is a British Corporation.

Whatever judgements it gets in Norfolk, these judgements are collected in England.

And when a claimant goes to England to collect, the first thing that the British Transport Corporation will plead is the British statute of limitation, not at that time, but limitation of liability.

Now, the British limitation of liability statute is different from ours.

It’s more favorable to shipowners than ours.

It’s one to which this corporation is entitled in an English court and an English court will give it that benefit.

So, there is one reason of why they must be —

Hugo L. Black:

Well, where would you think these lawsuits occur?

Dean G. Acheson:

I beg your pardon, sir?

Hugo L. Black:

Where would the British company lose anything by having a value of this claim fixed here and then finally, simply say, “We our only liable to the amount of the percentage of the total on our British men limitation act?”

Dean G. Acheson:

Well, Your Honor, it — it would lose this.

In the first place, there are 104 people involved here who are residents of the continent in England — on England.

So far as hardship for them is concerned, there’s certainly far or less hardship to litigating where you live than in litigating across the Atlantic.

So far as lost of evidence due to time is concerned, they presented much more easily and much more quickly and with less chance of laws in an English court that over here in Norfolk where everybody has to cross the ocean to do it.

And furthermore, there’s another great loss if they would infer.

And that is not only just the British limitation of liabilities statute applied, but under the British law, it has two contract limitations of liability.

They do not have the Harter Act provisions in this country.

And therefore, when contracts of affreightment are made or when personal passages are arranged, what the degrees of liability and for how much are determined?

Those are invalid in an American court.

They are not invalid in an English court.

Hugo L. Black:

You mean they would have to relitigate to some extent —

Dean G. Acheson:

Yes, sir.

Hugo L. Black:

— the amount due by reason of that difference in the law?

Dean G. Acheson:

They — they would have to do it for that reason and for another reason.

And the other reason would — would be that a decision in the Norfolk court as to the liability of the amount of the liability of the British Transport Commission to various claimants would not be res judicata in England.

And it would not be res judicata because, the English courts would say and properly say that at the time that the British Transport Commission appeared in the United States, the law was perfectly obvious to anyone who is not perhaps a lawyer.

Dean G. Acheson:

That it was not subjecting itself to the determination of its own liability.

It is not doing that at all.

The — the rule was clear.

The statute was clear.

The unbroken course of decisions of our courts have — had been in that direction.

And as I say, nobody had collected a cent in 106 years.

Therefore, the British courts would say, “Our national did not enter the American courts for the purpose of having its liability, if any, to your claimants determined.

And whatever the American court did is not res judicata.

And we will relitigate that court because we have our own statute of limitation of liability.

We have our own contractual reasons for liability, and — and we’re all here in Europe, and I have all our evidence here.

And therefore, that would be done.”

So, that —

Hugo L. Black:

I don’t quite understand that.

You mean that, if it’s the law of this country — I can understand why they might relitigate any of them, because it says that it couldn’t be properly litigated here.

Dean G. Acheson:

That’s what I meant.

Hugo L. Black:

Do you mean they would say, they would review our decisions to see whether we should have taken it?

Dean G. Acheson:

No.

They — they would say that the decision as to the liability of the British Transport Commission, two individual claimants was not res judicata at all.

It was persuasive.

It will be interesting.

It could be introduced, and then it might be followed by the Court, but it would not be compelling upon the Court.

Now, that may be very clear about one distinction.

It is res judicata as to who is at fault.

That point would not be relitigated.

That was clear, that —

Hugo L. Black:

I understood that.

Dean G. Acheson:

— but this Court would — would accept that, but it would not say, “We have a judgment which is a binding judgment on our case, because the Norfolk —

Hugo L. Black:

I can understand that argument if you — you’re saying that they just want to separate res judicata and the reference to the amount because they have their own laws and their own rules to determine it.

Dean G. Acheson:

No, the English —

Hugo L. Black:

I don’t quite understand how it would make any difference if they might have thought, we would hold this and didn’t have jurisdiction all over again.

Dean G. Acheson:

The English law, Your Honor, on res judicata is that their courts will determine, whether, in appearing in a proceeding in a foreign court, the English National appearing, was put on notice by the local law that he was subjecting himself to the judgment, which is now produced against him.

Hugo L. Black:

Well, if — let’s assume now that they looked at it and said they were right.

They knew it and they went in there with that knowledge.

Do you — is it your position that you’ve looked into it that the British courts would accept it as res judicata then?

Dean G. Acheson:

No, if — if you mean they would accept your decision in this Court after this —

Hugo L. Black:

Yes, as to the amount.

Dean G. Acheson:

No, they would not accept the judgment as to the amount.

And I think even if this Court should decide that a suit did lie, they would say, “From now on, this is the law of the United States, it’s perfectly clear.

Anyone who goes in now into a limitation of liability is on notice.”

Hugo L. Black:

And they would accept it there?

Dean G. Acheson:

I doubt they would but not now, not — not in the presence of it.

Now that we come to the second question, which the Court —

Felix Frankfurter:

That is the monition would involve a complete submission of every possible vulnerable claim after this had become clearly the law of the United States.

Dean G. Acheson:

That — that’s what the —

Felix Frankfurter:

That’s what the monition then would mean.

Dean G. Acheson:

That would mean, but the monition —

Felix Frankfurter:

What you’re saying the monition now means, you go in to litigate the limitation fault and the limitation of that fund.

Dean G. Acheson:

And that’s what it says and those were precise words, Your Honor.

That it says, “You are summoned to appear in the United States District Court in the City of Norfolk, et cetera, to litigate or to object to, if you wish, the question of the liability of the United States and the amount of your claim against the United States.

Now, that’s all that it says in this monition.

And that’s all that the statute says at the same road.

William O. Douglas:

I suppose there’s no British decision on this face of the law you’re speaking out here.You’re — you’re making a conjecture on the basis of what practice has been.

Dean G. Acheson:

I’m — I’m making a conjectural argument, Your Honor, so far as this case is concerned, but there are many British decisions on the principle which I’m arguing.

And that principle is, did the person who is now faced with the judgment, have noticed when he went into the foreign court that this issue would be litigated?

And if he did, the courts of England say, “Well, you’ve got to abide by it,” but if it was a surprise to him and this happens very often in the English courts between the continent in England, then they will retry the issue.

Charles E. Whittaker:

There are cases of that kind, Mr. Acheson?

Dean G. Acheson:

I beg you pardon.

Charles E. Whittaker:

You said there are English cases of that kind.

Dean G. Acheson:

There are English cases of that kind, not on this statute, Justice Whittaker, but there are of the kind that I would say and they’re cited in our brief.

Felix Frankfurter:

But your — your — or the proper construction of Rule 56 — correct me if I’m wrong, the proper construction for which you contend is not restricted to claims or appearances by foreign vessels.

Felix Frankfurter:

It would apply, as it’s an American vessel, would it not?

Dean G. Acheson:

Yes, it is.

Felix Frankfurter:

You’re construing the general statute, which is not restricted to the appearance of foreign ships.

Dean G. Acheson:

Yes I am Your Honor, yes.

You’re quire right.

Now, the — the Court of Appeals found another reason for overruling the District Court, reversing the District Court.

And — and this was on the analogy of equity receivership proceedings, particularly, the case of Alexander versus Hillman.

Now, it would always seem to me that the most confusing mental exercise, which one can indulge, is analogy.

That always makes these people up, because they get the wrong analogy.

Instead of thinking about the problem, they’re thinking about some other problem.

And here, the Court got on to equity receivership.

That it misunderstood what went on in equity receivership.

And then, applying an analogy wrongly, it came to a wrong conclusion.

The case of Alexander versus Hillman is one of insolvent to state, an out-of-state creditor appearing, to make a demand against the estate, but withholding from the estate, property of the insolvent in the hands of the claimant.

And this Court said, “You can’t do that.

If you come in here to litigate your relations with this estate, we’re going to litigate them all.

We’re not going to just litigate to what you want to litigate.”

And the Court said, “On behalf of creditors and stockholders, the receivers reasonably may insist, that before taking part, respondents made by the receivership court to be required to make restitution.”

Well that’s clear.

The distribution, it went on, may not be made without decision on the counterclaims.

Nothing is more clearly apart of the subject matter of the main suit, than recovery of all but to the res belongs.

Now, that’s perfectly clear.

But in this case, the main suit is the liability of the United States.

The res in the hands of the Court, if it were not for the sovereignty of the United States, would be the value of the Haiti Victory.

It’s not only possible but it’s necessary to determine the main suit and to distribute that res without confusing this, by side issues brought in by claims of claimants with one another.

Mr. Acheson, a non-bearing question, but do you draw a distinction between the asserted claim that you say is not here in the United States against the Duke of York, which they’ve tried to assert in this proceeding?

And the claimant said, “Being sought to be asserted against the Duke of York by co-claimants.”

Dean G. Acheson:

That — these are different questions.

Different questions.

Dean G. Acheson:

They stem really from the same main consideration, which is, did the British Transport Commission would come present in the United States for all the litigation, which might grow up of this collision?

Dean G. Acheson:

That’s the basic fact, but the rights of claimants against one another are somewhat different from the rights of the petitioner against the claimants, not very, but someone.

You’d say that it would — you’d say that it might be that the United States could cross-claim in effect your offset against the — against the Duke of York, but it doesn’t follow us on that, that a claimant, it exposes himself to a claim of procurement.

Dean G. Acheson:

Yes, I — I wouldn’t admit that premise, but I would —

I wouldn’t think you would.

Dean G. Acheson:

— enthusiast to digress the conclusion.[Laughter]

I’m wondering whether there is a distinction between the two of them.

Dean G. Acheson:

Well, I — I think there is some — some distinction, yes, Justice Harlan.

Now, the — the foreign law looks at the matter the way we — we look at it.

Can the law of all the, well, western maritime countries, Canada, England, France, Italy, Spain, Belgium, the Netherlands, all the Scandinavian countries.

Claimants in an admiralty proceeding cannot litigate issues inter se.

Now, the Government says, “Well, do you — you don’t really frankly state what the foreign law is, because they say in the foreign law,” that is the continent, this isn’t true of Canada, “but to some extent, in England and on the continent, liability of the shipowner must be determined before you begin the question of how much shall be given to what claimants.”

And the limitation proceeding which is the second one, does not have questions of liability involved in it.

And so, the United States has well, of course — of course, there are claims between claimants here, because all of that was settled in the original proceeding.

Well, what we say is you misunderstood it.

We — we are talking about the whole business as one proceeding.

Surely, they have different docket numbers.

They have different title numbers.

But the foreign courts decide the question of liability first just as we do in the limitation proceeding.

And when we say, “Is it none of these countries at anytime in admiralty make claimants claim against one another?”

They simple aren’t permitted to do so.

And in fact, in only two countries may a shipowner proceeded against, even put out a settlor against the claimant, and that is in the Netherlands and that is in France.

Now, Your Honors —

Felix Frankfurter:

Different statute or accepted admiralty law?

Dean G. Acheson:

That’s by accepted procedure, not by a statute.

It’s just never has occurred under the civil law of France and the Netherlands are deeply criticized, Your Honor, for permitting this.

Now, against this record of a 100 years, let me briefly speak of some cases which the Government brings up.

The Government’s argument is that admiralty is so flexible that whatever the rules say, this Court would be permitting.

In fact, the Government regards words as so genially compliant as to warrant the most remarkable results from using them.

On page 15 of their brief, they have this sentence.

It says, “Allowance of cross-claims between co-parties has been a characteristic feature of the limitation concourse since its inception.”

Dean G. Acheson:

Now, that would certainly seem to carry to the unsuspected mind that this had been a pretty characteristic proceeding for, well, over a century.

Curious, if that is so, that both the courts below thought it was a case of first impression and that the co-respondents in this case also think it’s a case of first impression.

However, one finds on reading further in the Government’s brief that they don’t mean what they say at all, but they do mean, is that in libel actions, where a shipowner libels another shipowner, and that shipowner in turn libels back, that in those proceedings, each shipowner is entitled to limitation.

Well, of course, he is.

Nobody has ever suggested that he wouldn’t be.

Limitation is a defense, whether it be a libel or a cross-libel or however it is, maybe, you’re entitled to that defense.

But it certainly is not the case.

In fact, the exact composite is the case, that allowance of cross-claims between co-parties has been the characteristic feature of limitation procedures in section.

Nothing could be informed erroneous than that.

And the case is which it gathers together, asserting that admiralty must be very broadly and broadly administered.

Our cases, which have nothing to do, were the problem before us.

For instance, in the Scotland, what was the Scotland about?

That was a case, which said the foreign shipowners are entitled for limitation proceedings just as much as American shipowners, well, of course.

The North Star is a case, which holds, that where two ships are equally liable, each ship is entitled to limitation.

Well, surely, it is.

The Epsilon, which they cited, it’s a case, which says, “Limitation is available for personal injuries as well as injuries to the ship.”

The Adah, a great deal of talk about the Adah in the Governments brief, that is authority for the proposition which I’ve been insisting upon here, which is, that all parties to the limitation proceeding avowed from the question of fault, just as the Commission is bound here.

And so, we go along, finding no cases, which support the Government’s argument until we come to two, that they think there are two, the City of Boston and the Eastern Dredging case.

Now, these are not two cases, they’re one case.

They’re in 1909.

They were both in the same District Court in Massachusetts.

They did not grow out.

It was very earthshaking, a maritime disaster.

The ferryboat, in the City of Boston, and Boston harbor run into a scow and did not hurt the scow at all.

It didn’t hurt itself much, but that Mr. and Mrs. Davenport fell overboard and they were rescued, a good deal of outrage by the performance, but not much the worst way.

Both shipowners started limitation proceedings in the same court in Boston.

The Ferry Company went into the Dredging Company’s limitation preceding and filed a claim, the sum of $4000 just to call us to fix up the ferryboat.

Mr. and Mrs. Davenport went into the ferryboat’s proceeding but not into the scow, and they claimed $3500 for their experience in the water.

Judge Dodge thought this over and the problem was, of course, how did both ships we’re held equally at fault?

How he get the Davenport damages equally divided when they were claiming in one preceding but not in the other.

Dean G. Acheson:

So, first of all, he made a mistake.

The report on page 171 of 182 F., he held that it to bring the scow into the ferryboat’s proceeding.

This is cited by the United States.

However, on page 179, he did change his mind on that, and thought that wasn’t a very good procedure.

And the best thing to do is to allow the Ferry Company, which was in the Scow Company’s proceeding to put one-half of the Davenport’s judgment onto its claim, which they did.

So, you see, nobody was brought in under Rule 56 and made pay anything.

The same thing turns out to be the case of — of that long litigation between the United States and the Steel Products Company, which grew out of the accident on the Pacific Maneuvers of 1920.

There, the steel inventor, a ship of the Steel Products Company, had got into the middle of the destroyer formation on night, and ran into and sank the USS Destroyer Woolsey, making a total loss of it.

There were several hearings that were all cited here, except the last part, which should be.

The first point was two cargo owners, owners of cargo on the Steel Inventor, who were prevented by the Harter Act from suing the Steel Inventor went into the limitation of liability proceedings started by the Steel Inventor, and said, “We cannot sue the Steel Inventor.

We can’t sue the United States because it’s sovereign.

But if the Steel Inventor is held at fault, it’s going to be a big fund in the Court and we want our share of it.”

And after some discussion, it was decided very well, “You can file your claims against this fund, not against United States, it’s the sovereign.

But before the United States gets the money, maybe you can get hold of some of it.”

This is said to be a cross-claim.

It wasn’t a cross-claim.

It was a claim on the fund in the hands of the Court.

But furthermore, nothing came of it, because it was decided that the Woolsey was at fault and not the Steel Inventors, so the whole litigation evaporated.

Then, there was another part of the litigation, which is much more interesting, and that was that the United States came into the Steel Inventor’s proceeding with a claim, whereupon, the Steel Products Company, filed a cross-libel against the United States.

And Judge Hough said, “You can’t do that.

That can’t be done.”

Because he says, “This does raise the question of an affirmative claim against the claimant in a limitation proceeding.”

And he should — the argument here is that every claimant who answers and opposes limitation is a libel, and therefore, is subject to a cross-libel.

But he says, “That isn’t so.”

“A libel,” said Judge Hough, “is a statement of claim on which process may issue.

No process issues on an answer.”

“A libel must state damage.”

But he claimed, “It does not have to state any damage.

All that it states is that a claim is put in.”

Three a libel is the beginning of an action.

Dean G. Acheson:

The answer is not the beginning of an action.

Now, he says, “Surely, this is technical.”

And then, this sentence, which I — I venture to quote to the Court, “These technicalities are not unimportant.

For while there could be a theory of law without any applied technique, there can be no application thereof without some technique, which lies at the very foundation of legal application.”

And so, he said, “There cannot be a cross-libel in a limitation proceeding.”

Now, counsel criticized this opinion, and I think —

William O. Douglas:

What — what was the name of that case?

Dean G. Acheson:

— they do it rather harshly because —

William O. Douglas:

What was the name of that decision?

Dean G. Acheson:

This is the Steel Inventor.

William O. Douglas:

Wasn’t that a recent decision?

Dean G. Acheson:

No.

That is the recent one, Your Honor.

That was in 1921.

The recent one is the Moore-McCormack decision.

Harold Burton:

But then, the Government says, “Well, Judge Hough didn’t cite any — any authorities.”

Dean G. Acheson:

Judge Hough was agreeing with the Government.

The Government was presenting to Judge Hough the argument, which I am now presenting to you.

And at that time, there were no authorities or clearly, the Government would’ve found them.

But they thought —

Felix Frankfurter:

Did you invoke the fact to Judge Hough?

I haven’t read the opinion.

Dean G. Acheson:

I beg your pardon?

Felix Frankfurter:

Did he — did Judge Hough invoked the practice?

Dean G. Acheson:

Practice?

Felix Frankfurter:

Yes.

Dean G. Acheson:

Yes.

Felix Frankfurter:

Because even the good deal of a car did himself.

Dean G. Acheson:

Very considerable authority, Your Honor, very great authority.

But the Government says, “Judge Hough was reversed by the Court of Appeals,” and that we, in our brief, did not mention that, and it points out how unfortunate that was.

Dean G. Acheson:

It would indeed have been unfortunate if it had occurred.

But unfortunately, there is still another decision, which the Government didn’t come across.

And in that decision, the Court of Appeals found as I say, that the Woolsey was solely at fault.

Therefore, it ends up its — it’s true.

It disagreed with Judge Hough.

It said, “Well, we want him to decide on this one.”

But it ends up its decision by saying, “In view of our decision as to liability, all other questions raised on this appeal are moot.”

So, this Court of Appeals for the Second Circuit was saved from error by mootness on that point.

The Court of Appeals is, I hope, going to be saved from error again by this Court.

In Moore-McCormack, it decided that the claimants could file claims against a co-claimant.

That, however, was an interlocutory decision.

The case is now at trial.

And so, we believe that before it reaches the point where the Court may I have to commit error, Your Honors will have saved them from doing so.

Felix Frankfurter:

Would you mind telling what these citations of Judge Hough’s opinion?

Is that the — the matter of the Court?

Is that the —

Dean G. Acheson:

That’s —

Felix Frankfurter:

— 1925 A.M.C.?

Dean G. Acheson:

Yes, Your Honor.

Felix Frankfurter:

All right.

Dean G. Acheson:

It’s 19 —

Felix Frankfurter:

1924, all right.

Dean G. Acheson:

1925 American Maritime —

Felix Frankfurter:

Evidently, it’s not in the federal report.

Dean G. Acheson:

It’s not.

There is one other decision, which they cite, which had the same fate, The Clio and The Springhill.

There, there was an intervention permitted under Rule 56, not an intervention, but of bringing in of the shipowner into another shipowner’s limitation of liability proceeding.

But there again, the fault was found on the ship who brought in the third party, and therefore, that again evaporated.

So, I end up as I begin, Your Honors, by saying that in the whole 106 years of practice under this statute, there has not been one single case where a dollar has been recovered from the claimant in the limitation of liability proceeding.