Guzman v. Pichirilo

PETITIONER:Guzman
RESPONDENT:Pichirilo
LOCATION:Labor Union Protest

DOCKET NO.: 358
DECIDED BY: Warren Court (1962)
LOWER COURT: United States Court of Appeals for the First Circuit

CITATION: 369 US 698 (1962)
ARGUED: Mar 27, 1962
DECIDED: May 21, 1962

Facts of the case

Question

  • Oral Argument – March 27, 1962 (Part 2)
  • Audio Transcription for Oral Argument – March 27, 1962 (Part 2) in Guzman v. Pichirilo

    Audio Transcription for Oral Argument – March 27, 1962 (Part 1) in Guzman v. Pichirilo

    Earl Warren:

    Number 358, Laureano Maysonet Guzman, Petitioner, versus Ramon Ruiz Pichirilo.

    Mr. Nachman.

    Harvey B. Nachman:

    Mr. Chief Justice, may it please the Court.

    This case presents a question that is here for the first time that is whether a longshoreman who was injured on a conceitedly unseaworthy vessel whether he may have his rights against the ship owner and his security against the vessel vitiated by the facts that the owner of the vessel demised it to his stevedore employer.

    May I say that this question although raised by the respondent in the District Court does not really arise in this case until the Circuit Court’s opinion because the District Court found as a matter of fact that there was no demise.

    And we contend that the Circuit Court of Appeals has violated the injunction of this Court in the McAllister case by reversing the District Court on evidence that was not clearly erroneous.

    I think perhaps it’d be best to state the respondent’s argument in the District Court.

    The respondent’s argument it was, the owner has no personal liability because he has demised his vessel to someone else.

    And despite the injunctions of Sieracki and all the cases of this Court that followed Sieracki that an owner has a non-delegable duty to provide and maintain at all times a seaworthy vessels.

    A demise makes the demisee pro hac vice the owner and therefore the owner’s interest is cutoff.

    Therefore he has no in personam liability.

    And the demisee who happens to be covered by a system of working with compensation cannot be liable because he’s been exonerated by workmen’s compensation and therefore this longshoreman who was injured exactly the same way that Sieracki was on an unseaworthy vessel in navigation is just tough luck.

    He doesn’t have any right.

    He can’t collect against anyone.

    Is this a —

    Earl Warren:

    Would you mind briefly stating the facts of the case —

    Yes.

    Earl Warren:

    — Mr. —

    Harvey B. Nachman:

    Yes Your Honor.

    The facts of the case were simply that this longshoreman was aboard this Dominican flag vessel in the Port of San Juan, Puerto Rico.He was working on deck when a shackle on the boom broke.

    The boom fell and crushed his head and split like a pineapple, that’s the case, just what happened.

    No defense was ever raised that the vessel was anything but unseaworthy.

    The only defense raised was that we’re not liable because there was no in personam liability.

    William J. Brennan, Jr.:

    Well now whether — what — what were the facts of the demise?

    Harvey B. Nachman:

    Well, I’m coming to that Your Honor and it’s right now, the District Court had the following evidence —

    Potter Stewart:

    And just before you do if you will.

    Harvey B. Nachman:

    Yes sir.

    Potter Stewart:

    Mr. Justice Brennan’s acquiesce is just to get back for a minute to this accident and the status of this man, the ship so the Court of Appeals held had been demised to this man’s employer.

    Who was on it — he was stevedoring.

    Harvey B. Nachman:

    That’s right.

    Potter Stewart:

    His name was stevedore.

    And this plaintiff, this petitioner whom you represent, was he a regular member of the crew or was he just on their temporarily as a —

    Harvey B. Nachman:

    He was a longshoreman employed by the stevedore who came aboard just to unload the vessel.

    He was a regular longshoreman in that Puerto Rican harbor.

    He had no other official connection with the vessel as a crew member.

    Potter Stewart:

    He was a shore based employee.

    Harvey B. Nachman:

    He is an American citizen, resident of San Juan, Puerto Rico.

    He was not a Dominican as all the other members of the crew were employees of — under a Dominican flag vessel.

    Potter Stewart:

    He was shore based, and he was on there to unload or to load the vessel.

    Harvey B. Nachman:

    That’s right.

    Potter Stewart:

    And he had no — he is not — have a Jones Act claim then?

    Harvey B. Nachman:

    None at all under the decisions of this Court.

    Potter Stewart:

    No, no.

    Harvey B. Nachman:

    He was not a —

    Potter Stewart:

    And the —

    Harvey B. Nachman:

    — member of the crew of the vessel.

    Potter Stewart:

    The members of the crew of the vessel, were they employees of this man’s employer?

    Harvey B. Nachman:

    Well, the —

    Potter Stewart:

    Or is that a matter of controversy

    Harvey B. Nachman:

    That is just a matter of controversy.

    The District Court said, “No, the employer did not insure them under the State Workmen’s Compensation system as he was required to do under Puerto Rican law.

    They were all citizens and the Domiciliaries of the Republic of the Dominican Republic.”

    The captain, the master whose deposition was taken testified that he was an employee of the respondent, not of the demisee.

    He referred — he never — he said that the Indian worker was not his fellow employee and he referred to the stevedore employer as a completely third party as not his employer.

    This comes to answer Mr. Justice Brennan’s question.

    And this was the evidence presented by the master.

    The — there was also as I stated before no coverage by the stevedore employer of the crew under the local compensation law which was required and which this Court refused to review last year.

    And the operator was registered with Customs at being the registered owner in the Dominican Republic.

    William J. Brennan, Jr.:

    Now the operator being who?

    Harvey B. Nachman:

    The respondent in this case.

    Harvey B. Nachman:

    The stevedore employer was the only one who testified on behalf to the respondent.

    And he testified that he was operating, managing and controlling the vessel.

    That he had it under a sort of demise or he didn’t do it that way, what happened was that the respondent’s proctor made a series of leading questions which the trial court admonished to influence said, “I can give no credence at all to this testimony.

    You are putting words into this man’s mouth.

    You are mentioning charter, charter, charter, so he finally says charter.”

    So they continued with this line of testimony at the conclusion of which after he had just finished saying, “I am the operator.

    I am managing and I am controlling the vessel.”

    The District Court says in the record and as in page 17 of the record, “I don’t believe that you were the operator or in control of the vessel.”

    Then the District Court in its opinion says that, “Since there was no written charge, since there was no tangible evidence or whatsoever except this testimony, connecting the stevedore employer to the vessel that the evidence is too meager as a matter to constitute a demise.”

    And in his findings fact, the trial Judge found that the respondent was the owner in possession and control of the vessel.

    William J. Brennan, Jr.:

    So, where is that?

    Harvey B. Nachman:

    That’s in page 20 Your Honor in the record.

    The — all of these are within three pages at Record 17, 19 and 20.

    Now, the Court of Appeals was aware of the McAllister case and they avoided it from by a bootstrap doctrine which they said as follows.”

    We believe that the District Court believed the testimony of the stevedore employer.

    But we believed that he made an incorrect legal influence from this testimony and therefore we will not be bothered by McAllister at all, as to the facts.

    We will say, assuming this testimony to be credible of the stevedore employer.

    We say there was demise.”

    Now, I submit that even if the Court of Appeals has this power which we say they don’t under the McAllister rule.

    We say this is a completely new reading of a — of the evidence in a trial de novo in an appellate court that this is an incorrect statement of the law.

    Gilmore & Black say, that a vessel under complete operation and control where in the hands of the operator maybe constituted a demise.

    But there is no case that I know of decided by this Court that says that a demise maybe created by parole.

    There is a case of the First Circuit Court which says so but that’s dicta and that’s back in 1825.

    And they said that in that case that a demise maybe created by parole.

    But in that case, there was actual written evidence of the relationship between the parties.

    The one case, that that case, that early Circuit Court of Appeals case said, that holds that a demise maybe created under American Admiralty Law by parole relies upon is a (Inaudible), which is a Massachusetts case decided prior to early 1800.

    And in that case, a demise was constituted by parole but an in rem liability was placed against the vessel anyhow for a breach of a contract of freight.

    But that’s jumping ahead of us.

    The definition of a demise was in this Court in Reed against the United States which it said we must look to what purposes will be effectuated by the relationship between the parties.

    There was no parole agreement in that case.

    Harvey B. Nachman:

    But in all of the cases that have arisen as to whether or not a demise maybe constituted by parole or whether there must be some evidence to reduce an agreement to writing.

    They’re all cases between the purported demisor and the purported demisee.

    These are questions with relations between two contracting parties.

    These are not cases involving the rights of a third person as against the vessel.

    The only cases that I can think of in all of Admiralty Law today or the last — since the Reed case where demises actually exist by parole are the harbor craft in large ports of the United States like New York and Philadelphia wherein these cases there has always been proof of a Custom of the industry to constitute the overcoming hurdle of no parole.

    William J. Brennan, Jr.:

    I just think here that the — without a written — a writing evidencing a demise that — that could not be a conclusion that there has been one?

    Harvey B. Nachman:

    I wouldn’t go that far.

    William J. Brennan, Jr.:

    Well, what’s your point then?

    Harvey B. Nachman:

    My point is that the evidence such as at is, is insufficient in law to constitute a demise under the decision in the Reed case which says we must look to what purposes maybe effectuated.

    And if the relationship can be defined as anything else but a demise then it is not a demise.

    And this relationship could be defined as the District Court did in — in — during the trial as perhaps a trust relationship for a man whom was his friend and could not leave the Dominican Republic, as perhaps an agency agreement, or perhaps as a collector for the owner.

    William J. Brennan, Jr.:

    But you make no point to the fact that that was not in writing.

    Harvey B. Nachman:

    That would not of itself be the major concern.

    It certainly one of the factors I think to which an Admiralty Court must determine whether a true demise exist.

    Potter Stewart:

    Of course if you had a demise in writing you’d —

    Harvey B. Nachman:

    There’ll be no problem.

    Potter Stewart:

    There’d be no problem.

    Harvey B. Nachman:

    All the other cases —

    Potter Stewart:

    When you don’t have a writing, that you do have a problem.

    Harvey B. Nachman:

    That’s right.

    And what kind of evidence would constitute a demise I say that the Circuit Court in this case has no basis for this holding under any of the decisions in American law.

    Now, as affects third parties because this — in answer to your question Mr. Justice Brennan there are other things to be considered if it were just not in writing I supposed that vis-à-vis the charter, the purported charterer and the demise, there would be evidence as to what kind of relationship, what they wanted to do with the vessel, etcetera.

    But, can it be constituted in a case involving a third party?

    In other words this libellant comes into court with a claim against the vessel and against the owner.

    And the owner through the testimony who — who doesn’t appear but through the testimony of his stevedore employer collaterally sets up a demise that just doesn’t exist anywhere in which there’s no notice of anywhere.

    Neither the — the libellant nor could a supplier or anybody who had to service this vessel had found out about the demise because the first evidence that anybody ever heard of the demise was after a lawful suit brought.

    Customs didn’t know there was a demise.

    The workers didn’t know there was a demise.

    Anybody who supplied services to this vessel did so in the name of the owner, the only name that was carried in the letter — in the captain’s cabin was the only name carried in Customs.

    They were dealing at all times as far as they knew with the owner.

    Potter Stewart:

    Can you interrupt your argument long enough to tell me (Inaudible) the — what that characteristics are of a demised charter?

    Harvey B. Nachman:

    As I understand — as I understand it Mr. Justice Stewart a demised charter is a charter where the possession and control are passed completely for a stated term on stipulated sets of agreement to someone else to operate for his profit and to pay a rental or surplus.

    Potter Stewart:

    How does that — are different from a bareboat?

    Harvey B. Nachman:

    I don’t — I haven’t yet defined any difference in the books between a demised charter and a bareboat charter.

    Potter Stewart:

    Bareboat charter.

    Harvey B. Nachman:

    I think they are the same.

    It differs only from a voyage charter or a time charter which are completely different —

    Potter Stewart:

    Yes.

    Harvey B. Nachman:

    — signs of agreement.

    Potter Stewart:

    Yes.

    William O. Douglas:

    Is the only — the only decision on your side of the case in your favor of the Learned Hand opinion (Inaudible)?

    Harvey B. Nachman:

    Well Your Honor, I think that all of the cases are — I might favor with the exception of the Vito — Vitozi cases.

    I know of nothing that stands up —

    William O. Douglas:

    You did mention in the Grillea case that this was a matter of first impression.

    Harvey B. Nachman:

    In the Grillea case, we have exactly the same fact situation where the seconds — where there was a demise, it was unquestioned.

    The United States Government entered into a demised agreement with Moore-McCormack Lines.

    They set out of a full charter with all the rights as between themselves and Grillea of the longshoreman sued the United States of America and the War Shipping Administration.

    And after the question of whether or not it was — as if it were an in rem suit under the suits in Admiralty case was decided.Learned Hand said that it doesn’t make any difference whether they’re stevedore employer, Moore-McCormack is also the demise charter because the United States, if it had been a private party would have been liable in rem anyhow.

    And therefore this man has his remedy and has leaned under the Grillea — under the Sieracki case and as between the rights of the United States and Moore-McCormack, there was in that case an indemnity agreement.

    But there need not be because in the Barnstable which this Court decided many year ago was also a written demised charter where the demisee was operating the vessel and was in collision with another vessel.

    There was never any question that the injured victim, the vessel that was — was sunk or damaged as a result of this collision could collect in rem against the Barnstable.

    The only question that this Court decided as who had ultimate liability, the demisor or the demisee as between themselves?

    Those are the only two people that were before this Court in the Barnstable.

    This Court has many times held that an owner out of possession and control maybe liable.

    The only case Mr. Justice Douglas that one doesn’t is the South — the District Court case from the Southern District of New York, the unreported case of Vitozi against S.S. Platano upon which the respondent and the Circuit Court relied.

    All other cases have held as we had — as we are contending for.

    There are, I might point out, many situations where a shipowner may have someone else operate a vessel for on behalf or with him for various purposes.

    A Circuit Court recently decided the Mission San Francisco cases which involved the United States MSTS contracts with masters and tankers where they would jointly held liable to anyone involved.

    Then there’ve been cases where the identity of the employer was so confused on the part of the employer as — so that you could not differentiate whether A, B or C was the actual employer of a particular seaman.

    All were held jointly liable.

    Harvey B. Nachman:

    So that, we feel that on this basis of that — there was a demise even assuming that the testimony of a stevedore employer was credible that the Circuit Court erred and the case must be reversed.

    The next question that arises is whether assuming a demise, there was in personam liability on the part of the shipowner.

    Now, here this is a conflict between the First and the Second Circuits too.

    The First Circuit had the Vitozi case prior to the Southern District of New York had it in the rem action.

    That was Vitozi against Balboa Steamship Company.

    And the First Circuit decided that since the owner had demised the vessel, he was the — the demisee was pro hac vice the owner and there was no in personam liability.

    Two years later, the same fact situation came up in New York in Cannella against Lykes Brothers Steamship Company.

    And again, Mr. — Judge Hand, for the Second Circuit said, “No, the shipowner is liable because there is a non-delegable duty upon the shipowner at all time.”

    And in this case, in its opinion, in the case here before this Court, the First Circuit admits it may have been wrong, but only as to an unseaworthy conditions that preceded the demise not one that supervened the demise.

    Mr. — in the Cannella case, Judge Hand says that he saw no difference even though in that case was unquestionably preceding the demise.

    But again, there’s this conflict where — which where the First Circuit stand and in some boats again on the Vitozi case.

    I would say that there is no reason if this Court is going to continue the humanitarian policy of Sieracki to say that there is no in personam liability on the part of the shipowner because he has demised the vessel.

    Potter Stewart:

    Do you think there’d be in personam liability on the part of the demisee had he not been covered by this Compensation Act?

    Harvey B. Nachman:

    As between him and the shipowner, sir an as between him and a third party if he had —

    Potter Stewart:

    That’s between him and the injured plaintiff.

    Harvey B. Nachman:

    Perhaps that he would be jointly liable.

    Sir, he could — could’ve been sued.

    This way he couldn’t have been sued.

    Yes, I do think so.

    Potter Stewart:

    Certainly as —

    Harvey B. Nachman:

    They concede as much.

    They say he would’ve — he —

    Potter Stewart:

    And they say —

    Harvey B. Nachman:

    — was the one at fault —

    Potter Stewart:

    They say —

    Harvey B. Nachman:

    — but —

    Potter Stewart:

    — it was against him.

    Harvey B. Nachman:

    — only his exonerated.

    Potter Stewart:

    Yes, that’s right.

    Harvey B. Nachman:

    But this is no different than a vicarious liability statute.

    Harvey B. Nachman:

    The State of New York for example says every owner of a motor vehicle is liable for a damaged to a third party resulting from a negligent operating — operation of that vehicle no matter who operates it.

    And they have a compulsory insurance law in the State of New York obligating the owners to ensure their vehicle.

    So that a car rental agency in New York —

    Potter Stewart:

    Yes.

    Harvey B. Nachman:

    — can rent its car to a user and have at — and be on the same position as a demisor of a vessel and yet they’re held liable.

    And New York has never said that this is such a humanitarian policy as Mr. Justice Frankfurter said yesterday in the decision on the — on the Utah statute, that this is an attempt by states and by the national government to cope with this terrible problem of damage and injury to individuals and we have here an industry were they’re being clabbered every day of the week.

    Now, these longshoremen are in the most hazardous industry in the United States.

    Potter Stewart:

    They have a Compensation Act specifically covering them?

    Harvey B. Nachman:

    No, not — not —

    Potter Stewart:

    (Inaudible)

    Harvey B. Nachman:

    Not in Puerto Rico.

    The federal — it has been held that the federal Longshoremen Harbor Worker’s Compensation Act does not applied to Puerto Rico.

    But the Local Compensation Act which includes all workers in Puerto Rico has been held to have been delegated by Congress to the Puerto Rican legislature and this covers them as it covers all of the workers.

    Potter Stewart:

    All other employees in Puerto Rico.

    Harvey B. Nachman:

    Yes.

    Potter Stewart:

    I see.

    I guess that’s covered.

    Potter Stewart:

    Yes, that’s covered, they’re not special.

    Harvey B. Nachman:

    But is — as between the lessor or the demisor of the charter and the negligent party, the demisor always has his right over whether it be by indemnity, contract or indemnity-at-law or as they do it the common law states by passive acts and tort fees so that nobody is being punished.

    Its just where does the risk fall on the innocent victim or the man whose property is in use.

    Earl Warren:

    We’ll recess now Mr. —