Reed v. The Yaka

PETITIONER:Reed
RESPONDENT:The Yaka
LOCATION:Circuit Court of Anne Arundel County

DOCKET NO.: 509
DECIDED BY: Warren Court (1962-1965)
LOWER COURT: United States Court of Appeals for the Third Circuit

CITATION: 373 US 410 (1963)
ARGUED: Apr 22, 1963
DECIDED: May 27, 1963

Facts of the case

Question

Audio Transcription for Oral Argument – April 22, 1963 in Reed v. The Yaka

Earl Warren:

— Petitioner versus Steamship Yaka etc., et al.

Mr. Freedman?

Abraham E. Freedman:

Mr. Chief Justice, may it please the Court.

The precise issue in this case is whether or not a longshoreman may sue a vessel in rem, where the vessel is not owned by his employer, but where it is bareboat charted by the employer and where the injury was caused by an unseaworthy condition created by the or during the tenure of the bareboat charter.

Briefly Waterman Steamship Company owned this vessel the Yaka, and bareboat charted it to Pan-Atlantic Steamship Corporation.

Pan-Atlantic also does stevedoring operations, and while the vessel was in the Port of Philadelphia in the course of the unloading operation, Pan-Atlantic caused some staging to be brought onboard the vessel pallets, which were defective and this man while working broke through one of the pallets and was injured.

He sued the vessel, the contention here was that he was bound by the Longshoremen’s and Harbor Workers’ Compensation Act, he sued the vessel in rem.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Yes sir Your Honor.

He received compensation from the insurer for Pan-Atlantic Steamship Corporation.

He brought a suit against Waterman as the owner of the vessel, but did not pursue that.

As a matter of fact that was dismissed on a ground that the unseaworthy condition, which is alleged to have caused the accident occurred during the period of the charter so that the owner himself had no control whatsoever over the condition nor had no part in creating the condition or maintaining it.

So that — and that was not pursued, so that the specific issue, which is here involved is whether or not the Longshoremen can pursue the vessel in rem or whether the Pan-Atlantic as the employer and also bareboat charter precludes this man from pursuing the vessel.

There are a number of other side issues, which I would like to develop as we go along sir.

The District Court held that the vessel was unseaworthy and he charged the vessel itself with liability apart from any liability of Waterman or of the Pan-Atlantic Steamship Corporation.

He held that the Compensation Act did not apply.

He also did not apply the doctrine of the Smith versus Mormacdale case about which I will say considerably more in a moment or two, in which case the Court — for the Circuit Court of Appeals held that where the owner himself was also the employer, then the Longshoremen could not pursue the vessel, because in effect he would suing the owner.

In the Smith versus Mormacdale case that was the situation.

Here, it was one big step further on where it was not the owner who was the employer, it was a bareboat charter.

So that Judge Clary speaking for the District Court held that bareboat charter was not an owner and therefore he was not exempt or rather he meant, it was not barred by the Compensation Act, he could proceed.

He also held that there was indemnity over from Pan-Atlantic to the Waterman Steamship Corporation for the — rather to the vessel for the injury and for the damage caused by the injury, since Pan-Atlantic was responsible for the accident, for the unseaworthiness itself.

The Court of Appeals reversed —

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Ultimately yes, Your Honor.

As between — there was a contract of indemnity between Pan-Atlantic and Waterman so that Pan-Atlantic would be responsible ultimately, under its contract between these two.

Your Honors will find and I think this Court has said many times that this liability under this contract for indemnity does not affect the rights of third parties particularly in this kind of a situation.

That case came specifically before this Court in Pope & Talbot versus Hawn, H-A-W-N, where this Court said that the contract of indemnity cannot take away any rights from the longshoreman, which he may have against the vessel or her owner.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

In this case, there was Your Honor.

There was a charter party, which contained a contract of indemnity in it.

Abraham E. Freedman:

Although, there are other cases which say that there are five contracts of indemnity to do the vessel — to do the work properly, to do the work safely.

So that in any case I would think that there was either an express or implied in this case, the charter party itself contained a contract of indemnity, an expressed contract of indemnity.

Earl Warren:

In the absence of that contract of indemnity, is there any question about the liability of Waterman?

Would Waterman would have been liable?

Abraham E. Freedman:

No, Your Honor.

Unless Waterman is liable for the torts of the vessel itself, that was a question that’s been posed many times.

Many cases have said that unless the owner himself where he charters it has some hand in the creation of the unseaworthy condition, he bears no responsibility for it.

There are a number of cases that I will mention; Barnstable for one and a number of others would say that the owner time-charter or rather bareboat chartered his vessel has no control over it.

He is relieved and the suit itself must proceed in rem against the vessel itself.

The Court of Appeals reversed taking the Smith versus Mormac case one step further, whereas in Mormac case, Judge Staley speaking for the majority at that time held that the suit against the owner or suit against the vessel was in essence a suit against the owner and therefore, the Compensation Act barred the claim, that is the claimant in rem.

The Court of Appeals here reversed on that ground but incorporated a new doctrine into the law, namely that in every rem action there is got to be a accompanying personal liability in personam from other, either from the owner or in a part of the charter or someone else.

In other words, there’s got to be an accompanying personal liability.

This was something new in the law.

This was first developed I think in the First Circuit by Judge Aldrich speaking for the First Circuit of Court of Appeals in the Pichirilo case.

I think that case was argued here sometime ago and a companion case was argued just last week.

In any event, two Judges dissented from the Court of Appeals.

Chief Judge Biggs held that the decision was in violation or in direct conflict with this Court’s opinion in The Pinar Del Rio and also in the Sieracki case and Judge Staley concurring in the dissent with Judge Biggs also pointed out that he was the author of the Smith-Mormacdale case and this did not.

He dissented also in the ground that the Smith case did not extend beyond the actual owner, did not extend to a charter and no matter what he was, he was not an owner and therefore, he could not claim the protection as an owner against the libel in action in rem.

Now from almost the beginning of the time in this country, a lien against the vessel has been recognized and has been the basis for an action in rem against the vessel itself.

Every action in rem has got to have a lien against it before it can be prosecuted.

Perhaps it would serve a purpose; at this point, I would just take a half a moment to outline the difference between this kind of a lien, a maritime lien and an ordinary common law lien.

We all know that an ordinary common law lien arises and it’s based on the possession of the thing itself.

A maritime lien has nothing whatsoever to do with the possession.

It is a right in the property itself regardless of whether this possession has nothing to do with it, as soon as in all cases of personal injury to people who are lawfully on board and this Court said that in the very early case of the Stevens, the John G. Stevens than anybody who is lawfully on board and suffers personal injury, a lien arises against the vessel itself.

That’s a secret lien.

It’s an inchoate lien and becomes perfected as soon a libel in action, a libel in rem is brought to a conclusion, to consummation.

So that the distinction between this kind of a case between a libel — between a lien under the Maritime Law and the Common Law lien, which we generally recognize as possession.

At first, the Common Law lien attaches only because of the possession of the thing whereas under the Maritime Law the lien arises because it has the right of property, the thing which gave rise to the course of action as a right in a property itself.

This Court said exactly that in the Lotawana in the very early case in 1875, where in considering one of laws of Court in 1858, Rule 12, the Admiralty Laws was amended to wipe out the liens in connection with domestic vessels and so on.

On the theory that this that the lien, the libel – the lien and the Maritime Law was a procedural device.

Abraham E. Freedman:

In 1872, that law was amended and the Lotawana — this Court and the Lotawana construed it and said that actually it is not a procedural device, that is the lien under the maritime law, but it is actual in the words which they use where a property right in the thing itself.

And that’s the theory, that’s the bases which this Court has followed right down the line.

Now in the early days, tracing the development of this lien, we find it interesting to note from even in the decision by Chief Justice Marshal in connection with an embargo in the Little Charles back in 1880, where he held the connection with an embargo of the vessel itself, they held that the vessel is the personality all by itself.

And regardless of whether the owner knew what was happening at the time bareboat chartered it or whether he didn’t know, didn’t make any difference, the vessel itself was liable.

Following that, we find an opinion by Justice Story in the The Malek Adhel in 1844, reported in 43 U.S. in connection with an act of piracy.

The vessel was taken over by pirates and the vessel was held liable there despite the fact that the owner had no control over it.

The vessel itself was the offending thing, the Court there, Justice Story and Justice Marshall both pointed out that while the vessel is to a sense inanimate, yet is not really inanimate, it acts and it acts to the crew, it has a master, it reports to the master and therefore, it was the offending thing itself and therefore it was liable.

Following that, we have another series of decisions from this Court in the Barnstable for example, where the vessel was bareboat charted and the Court — this Court quoted in the opinions of Mr. Justice Story and Mr. Chief Justice Marshall holding that the vessel was in itself by personality and therefore was liable in rem for its own acts apart from any other consideration.

In the China, this Court reached the same conclusion where a vessel was required to take on a compulsory pilot and the owner there was absolved because, being a compulsory pilot, he couldn’t be responsible in personam for the acts of the compulsory pilot.

However, the Court said that the vessel itself was responsible, because the pilot was an integral part of the vessel, of the crew or the vessel itself.

And therefore, even though the owner himself may not have been liable, the vessel itself was in rem, under the basis of the lien theory.

Justice Holmes speaking for this Court summarized the situation quite well in his book called “The Common Law.”

And he again — in reviewing the all of the authorities pointed out that the vessel is really a living thing.

He said it becomes rational when we consider the vessel as an object with the crew, which acts through the master, which acts through the crew and has a separate personality.

My friends on the other side argued that Justice Holmes was in conflict with a case which he handed down in the Eugene Moran reported in 212 U.S in 1909.

And they quote some language from Justice Holmes’ opinion indicating that perhaps he was critical of the doctrine of the liable in rem of the lien theory.

However, my friends didn’t go far enough, because had they gone a little further and looked at Justice Holmes’ decision at the decision itself, they would have found that the liability was posed on the rem, on the liability of the ships themselves.

There were four vessels which were involved.

Had there been in personam liability, as my friends would indicate the owner would have been liable either for his share probably one half along with the liability of someone else.

Instead of that, Mr. Justice Holmes pointed out that there are four vessels and each vessel was liable for the accident itself or for the collision, each one on so and so it was a separate personality.

So that in all respects Justice Holmes’ opinion is clearly consistent with what he said in “The Common Law” and clearly consistent with the theory that the vessel is a personality and that a liable in rem rely in every case against the vessels apart from any liability of the owner or anyone else.

There are a number of other cases.

I would like to also point out in passing that my friend cite — say that the Fourth Circuit has aligned itself with the First Circuit in that you got to have an accompanying liability and they cite for that proposition Noel, N-O-E-L versus Isbrandtsen in an opinion by Judge Sobeloff.

Actually they are incorrect there too, in that case the vessel was taken out of navigation, the vessel was not in commerce at all, it was being prepared for the mothball fleet.

So it was out of navigation.

There was no warranty; this Court held that in the West case.

And therefore Chief Judge Sobeloff said that there just isn’t any liability either for unseaworthiness or negligence.

There has got to be some liability, he did not say that there has got to be an accompanying liability of some third party in personam as my friends would say.

Actually he said that in the case there wasn’t any evidence of negligence, there wasn’t any evidence of unseaworthiness, therefore there was no liability.

So that the Fourth Circuit case when read, indicates that it is in complete conformity with the contention which we urge and which the other cases that this Court has handed down indicate.

Abraham E. Freedman:

This Court said in the Canadian Aviator, speaking to Justice Reed, versus the United States where a vessel, or a merchant vessel following on orders from the Coastguard struck a submerged object and there was a technical question involved and the question whether the United States was liable, because the vessel itself was liable.

And the Supreme Court speaking to Mr. Justice Reed said that the vessel itself was liable, it was a person, it had a personality just as any person in rem and did not depend on any liability, any accompanying liability on the part of any owner.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Well, Your Honor it is in a sense a fiction, but when we look at the principle which Justice Holmes handed down, which Justice Story handed down and which Chief Justice Marshall handed down, it’s more than a mere fiction.

It is — the ship is a living thing and it acts, when it puts out to sea, the master is in complete command of the vessel, it acts through the master and her crew, so that actually while in a sense it is a fiction and has been called a fiction, all of the Courts actually referred to it as a fiction.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Well, Your Honor, I think there is some analogy, but I would say when an automobile, when you’re put out with an automobile from your home or some place, you come to the corner and you stop at a traffic light, you’re all times under the protection of the police, you are all times subject to the jurisdiction of the community.

When the ship puts out from the shore, there is no such protection, there is no such discipline.

Everything rests on the discretion of the master himself and the crew and what they do.

They may encounter a storm and they are on their own resources.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Sometimes sir.

Arthur J. Goldberg:

May I ask [Inaudible]

Abraham E. Freedman:

No, sir I do not.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

I think that it was incorrectly decided, yes, Your Honor.

I do because the Court there combined the liability of the master and in essence said that because the master would have to pay the judgment and it would be in conflict with the intent of Congress and the enactment of the Compensation Act.

Actually if Congress — this Court has gone at the rights of seamen and the longshoremen who have been called seamen right down through the ages and they have never surrendered any — permitted any surrender of the rights of any longshoremen except under the most clear-cut circumstances.

Now if Congress –-

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Of course, sir.

We get full effect — I would get full effect of the compensation scheme, but this was against the owner.

I might point out here Your Honor that the compensation scheme was directed only against the stevedore contractor and it never took into contemplation the fact that the Stevedore contractor is also the owner.

These are two separate identities and I think that there is considerable consideration that would have to be given if this question was squarely before the Court, where the owner himself has sued in personam not in rem, whether the owner in personam could claim exemption under the Compensation Act where he is acting as a ship owner as distinct from his actions as stevedore, that’s not in this case.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

I agree that It would be more substantive, but as I said, Your Honor, while the other is a fiction, yet there is a great deal of substance too, so it’s full of substance.

I would argue this, Your Honor, if we were filing a suit in personam against the owner, which I think we would have right to do and bring that issue squarely before the Court.

I don’t think this Court has to go that far.

I don’t think it has to go that far, because we have established — this Court has established that you’ve got a right to an action in rem quite apart from any action in personam that you may have against the owner himself.

This is decided.

Abraham E. Freedman:

Now, it would seem to me that we would be taking on an added burden if we were to argue that, because in that case we have to forget about — we do not have the basis of the action in rem to fall back on.

Had we not had it, undoubtedly, we would have approached it on that basis, sir.

Byron R. White:

Mr. Freedmen, does the ship get the right over against the longshoremen?

Abraham E. Freedman:

Against the bareboat charter, yes, Your Honor.

Byron R. White:

The ship does, not the owner?

Abraham E. Freedman:

Well, both.

Well as I think under the – this is a matter of contract, either express or implied.

And I think here there was an express contract in which the owner himself claimed the benefit of the indemnity agreement.

Byron R. White:

Clearly the owner that’s involved thought isn’t it?

Abraham E. Freedman:

Sir?

Byron R. White:

Clearly the owner that’s involved, not the ship.

Abraham E. Freedman:

Well, sir.

If we see, it’s really of the owner that’s involved, we are ignoring all of this precedent that comes down through the ages and here is why it’s important Mr. Justice White.

Byron R. White:

Let’s put it this way, the owner is also involved.

Abraham E. Freedman:

Sir?

Byron R. White:

Let’s put it this way, the owner is also involved.

Abraham E. Freedman:

Yes, Your Honor, I think probably that would be a more appropriate way of putting it.

The owner today with the advent of the corporate device where many shipowners are incorporating or organizing corporations only for each ship, and then when something happens, it could be a major catastrophe on board a ship and then while the litigation is going on this owner, this one ship corporation could assign or sell the vessel to some other individual and if we didn’t have this lien against the vessel itself many, many people although they would have a right to recovery could never recover because we got the one ship corporation and this is a prevailing practice today.

So then actually it’s more than a mere friction.

We’ve got something very real to contend with you know.

Potter Stewart:

Who would pay the judgment if your riding the ship?

Abraham E. Freedman:

Sir?

Potter Stewart:

Ship can’t make out a check to pay the judgment, can it?

Abraham E. Freedman:

The ship sir?

Potter Stewart:

We are talking about people here, not.

Abraham E. Freedman:

I don’t quiet understand Your Honor.

Potter Stewart:

If you’re right, who would pay the judgment if you prevail?

Abraham E. Freedman:

Well in rem action the ship itself would pay the judgment, if the money wasn’t forthcoming the ship could be sold and the proceeds used to pay the judgment.

Potter Stewart:

That’s true in any attachment case isn’t it if at all?

Abraham E. Freedman:

It’s true in any attachment case, yes sir, but there are differences.

Abraham E. Freedman:

Where you’ve got a lien against a vessel, an attachment case there might be mortgages ahead of you.

And in an ordinary attachment case then you might come in last and never get paid anywhere, whereas if you’ve got a lien against a ship in a priority, you’ve got a right in this property itself.

And this Court has said that these liens for personal injuries even supersede the lien of the mortgage, just as wages.

So there actually is a tremendous difference between the requirement of payment from the owner himself and looking to the ship itself for payment.

And, as I said with advent of the corporate device now this makes the situation — it makes it so much more necessary to maintain this rem theory and not to expand it any further.

Precisely the same situation came before the Court in Pacific Pie, a District Court case in State of Washington.

I cite it because this Court adopted that principle on a Sieracki case in 328 US.

And there we have the precise situation where the vessel committed the tort and it was sued and the Court there held that it was a third person and this Court cited it with approval in Sieracki.

This Court also in Monrosa versus the Carbon Black Incorporated, in an opinion by Mr. Justice Brennan where there was a Bill of Lading, this was not a personal injury case, there was a Bill of Lading in which there was a jurisdictional question raised as to where the owner could be sued.

This Court held that while the jurisdiction of the owner was confined to certain areas, the label in rem could be maintained where it could be before, and so long as the contract itself did not confine the ship in rem to the same jurisdiction, the libellant was free to bring his liable and rem against the ship itself apart from any right that he might have had against the owner.

Here again and this was a very recent pronouncement of this Court’s indication or intonation to maintain as a separate entity, the liability of a ship.

I’ve already discussed the Smith versus The Mormacdale opinion.

We say that it was wrong.

We think that this Court should reverse it.

However, the particular case that we are concerned with here now, goes even further than Smith versus Mormacdale.

Here in the particular case this Court said that there’s got to be an accompanying personal liability on a part of the owner or someone else before there can be a lien.

There is no basis in the law for that other than this decision from the First Circuit by Judge Aldrich.

But it is in conflict with all the decisions which I’ve recited to Your Honor, none of which require a personal liability, so that the Court of Appeals here went one big step further as Judge Staley pointed out and Judge Staley was the author of the Smith versus Mormacdale opinion, he dissented from the majority on the ground that unless it’s the owner himself then the Smith decision, the Smith doctrine doesn’t apply.

I would like to point out before I conclude, I would like to point out some other considerations, some differences between the owner himself, real differences between the owner and what my friends have termed the owner pro hac vice, bareboat charter has been declared or has been used, the label has been put owner pro hac vice, but he is really not an owner.

If Your Honors examine the charter and it’s — the relevant portions are set out in the record, you find that there are many, many limitations which the owner puts on the bareboat charter as to how you can use the vessel and where it’s got to go in a period of time and so on.

And I may say too that the charter, the bareboat charter isn’t liable for the mortgage, she’s subject to the mortgage.

If the owner should default during the period of the mortgage, the vessel could be taken away during the period of this charter, so that it’s possession is not complete apart from any, any surrender the vessel by the owner himself and he can’t do anything about it as the owner might be able to be do.

This opens the door, opens — stimulates much more thinking, many more ideas as to the differences between a real owner and an owner pro hac vice as my friends have told it or a bareboat charter.

If the Court please, unless there are any questions I would like to reserve the few minutes remaining for rebuttal.

Earl Warren:

You may Mr. Freedman.

Abraham E. Freedman:

Thank you sir.

Earl Warren:

Mr. Byrne.

T. E. Byrne, Jr.:

Mr. Chief Justice and may it please the Court.

It seems to me that I would like to take the first few minutes of my time to put this case in little better perspective.

Following the injury to this man Reed, he first brought an action in personam against Waterman Steamship Corporation.

T. E. Byrne, Jr.:

Waterman Steamship Corporation was the owner of the ship upon which he had been working when he was injured.

There was a motion by Waterman to dismiss on the ground that the condition which caused injury had arisen after the time that Waterman the owner had transferred possession to my client Pan Atlantic under a demise.

And the opinion was filed by Judge Kirkpatrick which is in this record, ruling on that, and Judge Kirkpatrick said that he — the District Court said that he could not at that time dismiss because all of the facts were not clear.

However, he did point out that it was, it’s at page 19 that opinion Justice Black, he did point out that it was perfectly clear law that for a condition which arose after the demise there could not be personal liability upon the owner.

Now the owner would be liable for a condition or an infirmity or a defective existed at the time he leased it to Pan Atlantic, but not for something that Pan Atlantic itself caused during the time it was in possession and control under the demise.

Now, the very day that the suit against Waterman, the in personam action against Waterman was dismissed, the devise of a libel against the ship in rem was filed.

Now, I think it is important that we note that there has been a judgment and no appeal from that judgment in the in personam action, Reed versus Waterman Steamship Corporation, so that under the usual rule of res judicata that has been determined here.

There is no personal liability of Waterman.

Potter Stewart:

That, is that — is that been decided by this Court that a bareboat charter is in a liability [Inaudible] when that is arising after the charter.

T. E. Byrne, Jr.:

Since the Barnstable case Your Honor, its cited in the briefs.

Potter Stewart:

We had a case last year Guzman against Pichirilo.

T. E. Byrne, Jr.:

You did not reach this question.

Hugo L. Black:

Didn’t reach it.

T. E. Byrne, Jr.:

No sir, in Pichirilo and Guzman, you decided on the ground that there was not a demise.

I believe Mr. Justice Clark wrote that opinion on that which you are holding, you noted this case in the Court below.

Potter Stewart:

But it was indicated in that opinion that the reason was it not or was it, that we have granted certiorari in that case because we thought issue was —

T. E. Byrne, Jr.:

Yes Your Honor that was a subject of Mr. Justice Harlan’s dissent and I don’t recall whether you joined in that or not Mr. Justice Stewart.

Potter Stewart:

Now, that’s not important but —

T. E. Byrne, Jr.:

But this point was reserved at that point.

Potter Stewart:

And it was indicated that this is the reason we’ve granted certiorari.

T. E. Byrne, Jr.:

That was the reason you granted certiorari.

Potter Stewart:

Which would that the implication from that would be that the — this Court at the time at least the certiorari was granted in that case it didn’t consider the question was foreclosed.

T. E. Byrne, Jr.:

Perhaps I don’t understand which question is foreclosed Your Honor.

Hugo L. Black:

The liability in this case of Waterman.

T. E. Byrne, Jr.:

Oh, I don’t think that the liability of Waterman was involved and I don’t mean Waterman but I mean the owner.

Hugo L. Black:

We are talking about the owner, in this case Waterman.

T. E. Byrne, Jr.:

Was involved in Pichirilo versus Guzman.

As I recall the decision of the Court of Appeals in Pichirilo held, first that there had been a device from out of the owner and therefore that the owner no longer owned and no longer controlled and operated the ship and that the demise had been into the Longshoremen’s employer.

Now what this Court held in that case if I understand this decision was that the evidence there was not sufficient to show a demise out of owner into employer.

Therefore owner being still in possession and control was liable for unseaworthiness.

T. E. Byrne, Jr.:

Now that is my understanding of that case sir.

It seems to me that the question before the Court really does not require that it reach this point for all time and for all purposes, because the question really is whether Congress may alter the maritime law and subsidiarily whether Congress has in fact altered the maritime law in this situation.

We really have here a case where personal liability has been extinguished by statute.

There has been discussion in my advisory’s oral argument this morning and I believe it was you Mr. Justice Goldberg, you were speaking about the contract.

Now the contract to indemnify in this situation which is in the record, beginning at page 55, actually that part of it is at 56 A.

This contract between my client, Pan-Atlantic the employer, and the owner of this vessel is nothing more nor less than a restatement of the law.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

If the Court please I am a stevedoring company, Pan-Atlantic is a stevedoring company it is also a ship owner.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Yes Your Honor, we are also a ship owner of other ships, we chartered this one, but as a regular part of Pan-Atlantic’s operations it does its own stevedoring work, it does not use an independent stevedoring contractor, we are not in any — by any means unique in that.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Oh yes that’s an in personam liability.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

The Longshoremen —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Well under certain circumstances.

Yes if they breach their warranty, but let’s say the owner has furnished —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Well I don’t see that — yes that’s in spite of the Longshoreman’s Act but that’s based upon a — this Court has said that’s based upon a contractual relationship which has been voluntarily entered into.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Sir I say this that Congress —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

No I don’t say that.

I say that Congress has intervened and validly limited my liability by statute.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Sir, his remedy is restricted.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Mr. Justice White, as I view the law it —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

I understand that.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Yes, that is one result of my argument put that way, but I say this sir that Congress in the Longshoremen’s Act has given to an employer a certain immunity if he pays and provides compensation, and that any steamship owner may that he chooses be his own stevedoring and a great many of them do.

Byron R. White:

And thereby [Inaudible]

T. E. Byrne, Jr.:

Yes sir.

No question about it, in my mind it’s been settled since 1933, I believe, there is decision in the Court circuit and there are whole group of lower Court decisions about it, this court had never squarely ruled upon in.

But it was Samuels versus Munson Line in the Fourth Circuit came up about seven or eight years, I believe seven years after the Compensation Act was first enacted.

That was the first case which to our knowledge said that a steamship company who would normally be liable to a longshoreman injured on board or let say in those days it was negligence, let’s say the negligent maintenance was precluded from recovery because Congress had stepped in and had provided that the employer’s exclusive liability would be that provided by the act and that has been —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Yes Sir.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Yes sir, it’s right.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

That’s right.

Byron R. White:

[Inaudible] to this case.

T. E. Byrne, Jr.:

You are right sir.

Arthur J. Goldberg:

And the additional [Inaudible]

T. E. Byrne, Jr.:

I think that is always the same sir.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Well, I don’t think that Mr. Freedman said that sir.

Byron R. White:

Why – what [Inaudible]

T. E. Byrne, Jr.:

Mr. Freedman was consistent —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Mr. — no.

No, Mr. Freedman was consistent.

He says that there is liability in rem in both instances and that the uniform trend of this — uniform line of decision in the lower courts is body that’s — a law that goes back into 1933 is wrongly decided.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Where the steamship owner sir, does his own stevedoring he is not liable at an action to common law under the diversity clause nor is he liable at a — to a third party action in admiralty.

The remedy is been, I’d say —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Not in that situation, if I as a ship owner employ my own crew and own my ship or taking demise charter of my ship and I also employ my own longshoreman, I say Congress has intervened and that this Court should not and I would submit cannot alter that situation and I don’t —

Arthur J. Goldberg:

[Inaudible]

T. E. Byrne, Jr.:

Sir, Section 905 of the Compensation Act is the act which — I don’t mean to point a finger and I apologize I do.

Section 905, since the act was first amended in 19 — or first enacted in 1926 has to my knowledge been amended only once.

Now that was fairly recently about 1959 if my memory serves me correctly.

There was then no attempt and no effort to change this result of the body of case law which goes back to Samuels versus Munson Line in a Fourth Circuit which includes Smith versus The Mormacdale in the Third Circuit and some other cases cited in the briefs in other courts.

There was no effort to change that.

Now the only expansion of the protection, if you want, we can put it my way or the only change in Section 905 will — was to expand the protection Mr. Justice Goldberg and to include as a beneficiary of this, shall I say immune from liability clause not only the employer but any individual fellow employee.

I think that resulted out of an attempt where Grace Line had its own stevedoring division out on the west cost and was, they were faced with this body of case law and they sued the captain individually in state court — in Washington I believe in those decisions sir.

The result of that attempt, while it was — if I may say so squelched judicially, there was an amendment to the — this section of the Compensation Act but since 1926 to my knowledge that is the only amendment or the only attempt to amend this section.

In other words I take it sir that it is congressional policy that there shall be immunity.

Arthur J. Goldberg:

[Inaudible]

T. E. Byrne, Jr.:

Sir I cannot honestly answer that question.

I’m sorry that I cannot.

We now have come to the question of what other similar situations have resulted in, as for example whether Congress can wipe out or expunge what would ordinarily be an in rem liability in any other situation.

Before I leave that may I go back to the contract situation?

A moment ago, I said that the — this I want to emphasis, I said that the contract here was merely declarative of the General Maritime Law and it seems to me that this Court’s decision I believe one we could go today in a case called Dixie Lien Drilling or something like that, clearly supports our position.

In other words the common law ever since the decision of this Court in the Barnstable, about 1901 has been that if I take a ship under a demise, I must return it free and clear of liens.

I, the charterer, I must return it to the owner free and clear of liens, that was the effect of the Barnstable decision.

Now I take it that the provisions of this contract only restate that law and that turning it around had there been in this contract an attempt on the part of Pan-Atlantic to covenant that it would not return the ship free and clear of liens which its acts might have been imposed upon it, in other words make the owner pay even though he was out of possession when the wrong was done and had nothing to do with the wrong, I say would run a foul of this Court’s recent Dixie Lien decision and the decisions which preceded it such Bisow versus — well Bisow is all I can remember and Southwest — Western Molasses case.

I think you run afoul of a public policy where you try and if that had been an attempt there which there wasn’t, to by contract change the General Maritime Law, this contract states what the General Maritime Law is.

We must – we the charterer must indemnify the owner under both the General Maritime Law and the contract.

We have attempted —

[Inaudible]

T. E. Byrne, Jr.:

No, I don’t have to, no sir I was simply saying that it was the common law and it couldn’t have been otherwise.

[Inaudible]

T. E. Byrne, Jr.:

No, it is not.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Sir I represent the demise or demisee stevedoring company, I do not represent the owner but both —

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Oh, yes.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

It might well Mr. Justice White, although it wouldn’t have to, because although my opponent urges you to go back to the early body of decisions and he refers to Smith versus Mormacdale which he says was wrongly decided and ask that you say something in this decision which would wipe out the effect of those decisions.

I don’t think you’d have to.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

The owner stevedore — not in this Court, no sir.

As I said there is a body, there is a body — the whole body going back to 1933 of lower court law.

Now I say Mr. Justice White this, that there are a number of analogous situations where Congress has enacted statues which have been interpreted as I urge that this one be.

Let me give you the illustration of the so called Fire Statute.

There is a statute which says that the owner who has used due diligence shall not be liable to cargo which has been damaged by fire on board a ship.

That case came up to this Court under this situation.

The owner had taken advantage and been discharged under the Fire Statute.

The cargo owner sued the ship in rem and said, ha, ha, the statute says, you, the owner are exempt if you meet these requirements, but your ship is not exempt.

And Mr. Justice Black, you cited the language from that decision in your decision in the Continental Grain versus Barge FMB something or other.

You quoted from, and extensively quoted, from this Consumers Import Company versus what I called KKK, a decision written by Mr. Justice Jackson in which you specifically said that a liability such as this was like talking in riddles, how could a person’s property be liable when by statue his personal liability had been exempt?

Now the question comes up also in this situation, what did Congress mean when it used in Section 905 of Compensation Act the words, I’ll get them exactly, “The liability of the employer shall be exclusive and in place of all other liability of such employer to the employee, otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury.”

Now, in the case of the Canadian Aviator which my opponent relies upon, the question came up as to what Congress meant when in the Public Vessels Act it had used the language at law or in admiralty.

And in this Court’s decision in that case it made it very clear that when Congress used the terms at law or in admiralty it was using in admiralty in the broad generic sense and it didn’t simply mean admiral — liability in a proceeding in admiralty in personam.

That it meant to include the in rem proceeding in admiralty.

In other words, it was not simply giving you a little bit and then taking the same thing away from you because for this Court say that the Congress has the power and did in fact exempt an employer, the individual from in personam liability, but yet to say that property, which is hit shall be sold as my adversary urges to pay is really a riddle, which this Court has consistently over the years refused to apply in its full vigor of the language, which people urge for it.

Arthur J. Goldberg:

[Inaudible]

T. E. Byrne, Jr.:

Oh!

Sir, if this Court is going to say that Congress does not have the right to limit the liability of an employer and is going to say in that broader language, then there is no question about it applies to the owner, it applies to the owner pro hac vice and I would sugges.

Byron R. White:

[Inaudible]

T. E. Byrne, Jr.:

Oh, yes, clearly.

Arthur J. Goldberg:

[Inaudible]

T. E. Byrne, Jr.:

I don’t get any additional comfort at all sir.

Now if when you read my adversary’s brief you note that at page 13 he argues the question of warranty and he says that the Longshoreman’s Act really created — sorry expunged in personam liability and then he goes on to talk about worthy in this situation.

Now if you are really talking about a liability of an inanimate object in the rem, it seems to me grossly inconsistent to speak in terms of warranty.

What you’re really doing if you follow that line of argument is applying the old law of deodand, you are condemning the thing which has done something, but why then cannot Congress expunge that liability and subsidiarily did not expunge that liability in this Compensation Act.

William J. Brennan, Jr.:

[Inaudible]

T. E. Byrne, Jr.:

Sir if the defect that existed at the time that the charter was entered into Waterman would be liable in personam or unseaworthiness this to thing under the decided case I don’t question that.

William J. Brennan, Jr.:

[Inaudible]

T. E. Byrne, Jr.:

Yes, both.

Oh no wait a minute, is the charter the employer in your question?

Oh no, then the employer of the charter would not be liable, but Waterman would be liable in personam sir.

William J. Brennan, Jr.:

[Inaudible]

T. E. Byrne, Jr.:

That would depend on the planks, it could have –-

William J. Brennan, Jr.:

Under the doctrine?

T. E. Byrne, Jr.:

Under the.

William J. Brennan, Jr.:

Under this doctrine you have liability —

T. E. Byrne, Jr.:

No, I don’t think so.

William J. Brennan, Jr.:

Why?

T. E. Byrne, Jr.:

Because they have reached their warranted — another provision of the charter when they turn this over an unseaworthy ship, unquestionably, but they would be liable in personam if they furnished an unseaworthy ship to this Longshoremen.

In other words, unseaworthy at the time they delivered to his employer and two weeks later let’s say he’s hurt as a result of it, he could sue Waterman in personam, I don’t question that and I do say and I don’t think Waterman could recover indemnity against Pan-Atlantic under that situation.

Arthur J. Goldberg:

Waterman was the employer [Inaudible]

T. E. Byrne, Jr.:

Waterman never was the employer sir.

Arthur J. Goldberg:

[Inaudible]

T. E. Byrne, Jr.:

That brings it more to the conventional situation, you can state it in those terms and that someone else would also happen to be the charterer and would be protected because he was the employer by the provisions of the Compensation Act, but the right against the owner would then exist in my view.

Some argument was made by Mr. Freedman a few moments ago about one ship corporations and mortgages and I must say I’m just unable to follow how that gets into this situation.

Either you have a Congressional statute which gives an immunity in this situation, and it doesn’t matter whether the corporation has one ship or ten and it doesn’t matter whether they are mortgaged or not.

I just cannot see the relevancy of the argument that was attempted to be made on that point.

Just in closing, I want to say that in the brief I — there are a number of instances where Congressional legislation has changed the result.

I have in oral argument only referred to the Fire Statute.

It would for example be so in a limitation of liability proceeding.

The Act there would permit the ship owner to limit the liability of a marine disaster.

The Act there only speaks in the terms of the in personam liability of the owner.

Given this situation a collision let’s say and the owner goes in and his liability is limited and he has satisfied that liability.

The ship is then sold, if my adversary’s position be correct, then after that sale or perhaps even without a sale, a separate in rem action can be instituted against the owner’s property.

This creeps into sovereign immunity cases, as this Court has held in a whole series of decisions, where government vessels were involved during the period of both government ownership and demise to the government.

Some were returned to their owners at the end of the demise, some were sold and then attempts were made to enforce the in rem liability and this Court struck them down.

T. E. Byrne, Jr.:

This Court has not, I submit, in other than what Mrs. Gilmore and Black referred to is rather [Inaudible] ever sustained the concept that there was a separate in rem liability when liability in personam had been expunged by the statute or otherwise and that should be I think decision of this Court here.

Thank You.

Earl Warren:

Mr. Freedman.

Abraham E. Freedman:

If the Court please this Court has already many time stated that even though in personam liability has been expunged so to speak at least in tact a liability in rem and I’ve said at those cases, I think I made references before.

Mr. Justice Goldberg previously said, is there anything in the Compensation Act which preserves the Right of Action against third persons.

Section 33 of the Compensation Act expressly preserve the Longshoreman all Right of Action against all third persons other than the owner, the employer himself, this and libel in rem is a third person.

This Court in Sieracki adopted the principle, they adopted and endorsed the case of the Pacific Pine where precisely the situation involved an owner’s Stevedore and there the Longshoreman was permitted to bring a libel in rem against the employer himself as owner of the vessel.

And this case as I said was endorsed by this Court in the Sieracki decision, so that we do have something on record from this Court.

Mr. Justice Black in the Cannella grant case did not do as my friend said.

Mr. Justice Black speaking for the Court pointed out very carefully that he was not destroying the libel in rem.

He was not destroying the lien at all.

All he was doing, if the Court please, made it very clear that the course of action was the same, that the witnesses were the same, and therefore there was everything to be said for transferring both in rem action and in personam action both at the same place where that could be tried at the same time.

And implicit in that opinion is the contention that the in rem action must be preserved.

Justice Black said in that case that there was a good reason for the rule originally and there was a good reason for it today and the very fact that any transfer of the case under Section 1404 (a).

So to bring the in rem and in personam action together as I said indicates that this Court attempts to preserve the in rem action and the lien which goes along with it.

Byron R. White:

[Inaudible]

Abraham E. Freedman:

Yes sir.

I would say not despite, I would say because of the Longshoreman’s Act, because the section 33 of the Longshoreman Act expressly preserve that Longshoreman rights against third persons and in Pacific —

Byron R. White:

[Inaudible]

Abraham E. Freedman:

The owner, the ship itself is a third person.

That’s what the Court said in the Pacific Pine and this Court endorsed that except that that proposition in Sieracki.

William J. Brennan, Jr.:

That maybe Mr. Freeman we have sought to interpret Section 33 namely that the ship was a third person if were to agree with you.

Byron R. White:

And the third person again has the right over against the —

Abraham E. Freedman:

Yes sir no question about that in my mind.

William J. Brennan, Jr.:

How do you answer me?

Do we have to interpret constitute Section 33 and its provision which says the Longshoreman rights over against third person as including the ship as a person in order for you to prevail.

Abraham E. Freedman:

I don’t know that I need to go that far Your Honor.

I think that strictly on the basis of the in rem action, the lien against the vessel itself would be sufficient.

I think that the Longshoreman’s Act is restricted only to the employer-employee relationship.

Anything outside of that is not within the Act.

Abraham E. Freedman:

As a matter of fact if I may say by analogy the case of the Pinar Del Rio where an action was brought under the Jones Act against the ship itself and this Court said, that you couldn’t have an action against the Jones Act, under the Jones Act against the ship because no lien was created by the Jones Act.

Thereby — but you could sue the owner in personam, thereby separating the liability of the employer from the liability of the ship.

You have two separate and distinct liabilities.

When you sue the ship you’ve got one liability but you only – you’ve got an entirely different liability under the Jones act.

Byron R. White:

Well then they are reaching the same result to say that the owner wears two hats that of an owner and that of a stevedore.

Abraham E. Freedman:

I think that’s correct your honor.

The owner when he does the stevedoring work is wearing two hats and I don’t think that Congress ever intended that he should be permitted to evade his responsibility as a ship owner when he acts under the guise of a stevedore coming in and becoming the employer which as a matter of fact, could be a paper transaction and generally in most instances it would be.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Only by implication Your Honor.

The legislative history deals with the liability of a stevedoring contractor, it does not deal with the liability of a ship-owner at all and it contemplated — by two separate and distinct categories as they always have been right down the line.

The stevedores do their work and the ship-owner do their work and if the ship owner doesn’t provide a sea worthy vessel he has a non-delegable duty for which he is responsible.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Yes, Your Honor.

Arthur J. Goldberg:

[Inaudible]

Abraham E. Freedman:

Yes Your Honor that’s my theory, those are my contention, thank Your Honor.

Earl Warren:

We’ll recess now.