Ryan Stevedoring Company, Inc. v. Pan-Atlantic Steamship Corporation – Oral Reargument – October 11, 1955

Media for Ryan Stevedoring Company, Inc. v. Pan-Atlantic Steamship Corporation

Audio Transcription for Oral Reargument – October 12, 1955 in Ryan Stevedoring Company, Inc. v. Pan-Atlantic Steamship Corporation

Audio Transcription for Oral Reargument – October 11, 1955 in Ryan Stevedoring Company, Inc. v. Pan-Atlantic Steamship Corporation

Earl Warren:

Number 4, Ryan Stevedoring Company versus Pan-Atlantic Steamship Corporation.

Mr. Schwartz.

Sidney A. Schwartz:

If Your Honor wishes me to start?

Earl Warren:

Yes.

Mr. Schwartz, you may proceed.

Sidney A. Schwartz:

May it please the Court.

The petitioner in this case, Ryan Stevedoring Co., Inc., has been granted a rehearing.

This Court originally heard this matter in March of this year and the judgment of the court below, the court below being the United States Court of Appeals for the Second Circuit, was affirmed by an equally divided court, Mr. Justice Harlan not being a member of the Court at that time.

Upon reargument having been granted in this case, the same questions and the same briefs are presented to this Court at this time as were before the Court in March of this year and the facts which are projected for this Court’s determinations are briefly as follows.

On July 20, 1949, Frank Palazzolo was a longshoreman employed by the petitioner Ryan Stevedoring Company.

And he was injured on board a certain vessel known as the SS. Canton Victory which at the time of his injury was lying in navigable waters in Brooklyn, New York and the Canton Victory was owned or at least was operated, managed and been controlled by Pan-Atlantic Steamship Corporation.

He was injured when a roll of paper pulp, which Your Honors may have seen carried on newspaper trucks in the city, jumped out of a bottom tier in a certain hatch or a hold which was known as number three and crossed his leg and he sustained severe injuries.

To recover pecuniary damages, Mr. Palazzolo instituted an action in the State Supreme Court in Brooklyn and that action was brought against Pan-Atlantic Steamship Corporation in which action and in which complaint, Mr. Palazzolo, the injured longshoreman alleged that Pan-Atlantic Steamship Corporation was negligent in the manner in which it had loaded and had permitted and suffered a certain stow to be loaded upon its vessel at Charleston, South Carolina.

Now, that stow and particularly hold number 3 had been made by Ryan Stevedoring Company at Charleston, South Carolina.

And I respectfully say to this Court and I think the record will show that at all times the cargo mate who was an employee of Pan-Atlantic Steamship Corporation, was in actual control and supervision of the manner in which the cargo was still in this particular hold.

Pan-Atlantic Steamship Corporation when it was sued in the state court removed the action to the federal court.

And after the action had been removed, Pan-Atlantic Steamship Corporation by a third-party complaint impleaded Ryan Stevedoring Company, the employer of the injured longshoreman.

And at this point and at the very outset, I would respectfully call the Court’s attention to the crux of the third-party complaint of Pan-Atlantic Steamship Corporation against Ryan Stevedoring Company, which is found at page 12 of the record.

Paragraph 10th of the third-party complaint says, “The plaintiff in his complaint has alleged that a pile of rolls of pulp collapsed as a result of which one of them fell upon the plaintiff causing him to sustain severe and permanent injuries.

It is further alleged that the defendants, their officers, crews, agents, servants and employees caused, suffered and permitted the rolls of pulp to be loaded and transported in a reckless, careless and negligent manner without being properly tiered, piled and secured.

As a result of which one of the said piled was cause to collapse and to strike the plaintiff.”

The plaintiff in his complaint further alleges that he was not furnished with a seaworthy vessel and this is the complaint that Pan-Atlantic makes against Ryan Stevedoring Company, the employer of the injured man.

The loading of the rolled of paper pulp was performed by the third-party defendant, Ryan Stevedoring Co., Inc., and at the time, the SS. Canton Victory was turned over to the third-party defendant, Ryan Stevedoring Co., Inc., said vessel was in a seaworthy condition.

If the rolls of pulp were loaded improperly or in a negligent manner without being properly tiered, piled and secured and if the SS. Canton Victory at the times mentioned in the complaint was thus rendered unseaworthy, such unseaworthiness was caused and created solely to the conduct, negligence, carelessness and recklessness of the third-party defendant, Ryan Stevedoring Co., Inc., its agents, servants and/or employees in the manner in which they performed the aforesaid work and in their failure to make proper preparation and to take proper precautions in the carrying out of the aforesaid work.

Now, the action came on to the trial before Chief Judge Inch of the United States District Courts for the Eastern District of New York and it was stipulated at the very outset of the trial that the right of Pan-Atlantic Steamship Corporation to recover over as against Ryan Stevedoring Company would be reasserted on the facts and the law for the trial court.

But that all evidence would be adduced at one time and the case which was originally triable by jury would go to the jury only for its determination as to whether the injured longshoreman was entitled to recover as against Pan-Atlantic Steamship Corporation.

And so the action was tried and the action went to the jury for its resolution solely against Pan-Atlantic Steamship Corporation and on this proposition.

One, was Pan-Atlantic Steamship Corporation negligent?

And two, was the vessel that it operated, managed and controlled unseaworthy?

The jury brought back a general verdict in the amount of $75,000 against Pan-Atlantic Steamship Corporation.

Sidney A. Schwartz:

And after that verdict has been rendered, Chief Judge Inch upon the submission of the entire record to him and upon the submission of briefs, determined the right over and he denied a right over in favor of Pan-Atlantic against Ryan Stevedoring Company in an opinion which Your — Your Honors will find at pages 316 through 319.

And the crux of Judge Inch’s findings, which dictated as far as he was concerned as the trial of the facts, no right of indemnity in favor of Pan-Atlantic, is found at pages 318 and 319 of the record.

And there extensively, Judge Inch refers to the uncontradicted testimony which was elicited from the cargo mate, in which he had testified that he was in overall supervision and control of the loading of the vessel at the port at Charleston, South Carolina and he was in overall supervision and control of the discharging operation here in Brooklyn, New York.

I might indicate to the Court that he testified time and time again that he was in the hold at the time of the loading of hold number three and that he actually saw the bottom tier from which this one pile — one roll came out and injured the plaintiff being stowed and that it was stowed to his entire satisfaction, if it had not been, he would have complained and would have seen that the work should be stopped.

In addition to that, the proof shows that this cargo mate was in the hold at the very time of the happening of the accident here in Brooklyn and that he was in there for 5 to 10 minutes and had seen the actual Stevedoring operation going on and that as far as he was concerned, everything that Ryan had done was done properly to his satisfaction.

And Judge Inch denied a right over and he said in his opinion, in view of this testimony which he outlined at length dealing with what the cargo mate had testified to, “It is plain that Pan-Atlantic’s cargo officer did not perform his admitted duty to supervise the safe and careful loading of the vessel.”

Now, I should indicate at this time that there was a question of law raised before the trial court which he did not decide and that was whether the statute which we had invoked, the U.S. Longshoremen’s and Harbor Workers’ Compensation Act and specifically Section 5 of the Act whether that was a bar to any claim of indemnity implied in law and I should indicate also at this time that this case presents a question of indemnity implied in law amongst other questions, there being no express contract of indemnity between the third-party plaintiff and the third-party defendant.

There is simply a contractual arrangement which was evidenced by letters that Ryan Stevedoring Company for an agreed price with stevedore, the vessels of the Pan-Atlantic at the various ports in the United States.

Hugo L. Black:

(Inaudible)

Sidney A. Schwartz:

He found them to be joint tortfeasor, Your Honor.

And as I understand that term and as I understand Judge Inch’s decision, he found that Pan-Atlantic Steamship Corporation had been held negligent by the jury on the basis of the cargo mate’s testimony as to his control of the situation, having been loaded to his satisfaction which the jury didn’t find to be satisfactory and he also found that Ryan Stevedoring Company was negligent also so that both of them actively and affirmatively participated in bringing the injury to Palazzolo.

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

I say that that is the third question presented, Judge Inch having determined as a question of fact that both of them had affirmatively contributed to the accident.

The United States Court of Appeals when it reversed — reversed and went beyond the scope of review under the McAllister case.

Felix Frankfurter:

Of course the demurrer — the demurrer to everything the Government says stand on that ground.

Sidney A. Schwartz:

No, I —

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

I could — I could say that all the questions that the United States can throw it with are academic if Your Honors reached the point of findings of fact contained in Judge Inch’s opinion as reversed by the Circuit Court.

Felix Frankfurter:

But why is not the first question answered?

Sidney A. Schwartz:

I don’t think it is, Your Honor, because that’s a factual question.

I think if Your Honor — if Your Honors get —

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

Well, I think — I think that maybe true, Your Honor, but as I thought the logical presentation, the first questions for the Court was, does the statute mean what it says and if it does you don’t reach the factual the question as to whether on this record there’s indemnity over or not.

And that — that’s the question — that was the first question presented by the petitioner in its petition for a writ.

Felix Frankfurter:

(Inaudible) that you want to argue to the Court (Inaudible)

Sidney A. Schwartz:

Your Honor, may not —

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

Well, I think this, Your Honor, and I say this in all fairness to the Court.

I think the first question that’s presented by the petitioner which is the first point is a question that’s crying for determination in view of the many cases that are pending not only in New York but all over the country dealing with this very question and all courts have rested with it, is the statute a complete bar or isn’t it?

And as — as I outlined in point one of our brief, the decisions or at least the various holdings and dictum of the Court of Appeals writing through Judge Learned Hand who was Chief Judge at the time that he wrote the opinion indicate that our position is the tenable one, namely, that — that the statute that has here been invoked by the petitioner means exactly what it says that it’s its exclusive remedy.

Felix Frankfurter:

Sorry, I didn’t mean to (Inaudible)

I have a general predisposition not to decide the case on the most difficult ground but on the easiest ground to decide it.

Sidney A. Schwartz:

Well, I think —

Felix Frankfurter:

But, don’t waste your time.

Sidney A. Schwartz:

Now, going — going to the —

Felix Frankfurter:

(Inaudible)

Harold Burton:

And may I ask you just there, is it clear in your mind that the liability of the shipowner is on the basis of negligence and not on the basis of unseaworthiness?

Sidney A. Schwartz:

It’s on both, Your Honor.

Both Court’s have so held, the District Court have — has held that Pan-Atlantic has been liable, has been held liable here for negligence and unseaworthiness and the United States Court of Appeals writing through Judge Frank has said and I — I respectfully —

Felix Frankfurter:

They took a different view of the significance of negligence.

Harold Burton:

They took a different of view of the quality of the negligence.

Felix Frankfurter:

The quality, the next important thing about comparative — the so-called comparative negligence and the relationship between two joint tortfeasor, who aren’t truthfully liable.

All right.

Sidney A. Schwartz:

Now, the — the —

Felix Frankfurter:

Isn’t that true?

Sidney A. Schwartz:

I think — I think Your Honor is correct in part that the — the question of comparative negligence has really been referred to plaintiff and defendant.

And here we have what the case is perhaps in imprecise terms have referred, at least we characterized it so in New York, as active and passive negligence.

Felix Frankfurter:

But in — Judge Inch found active negligence on the part of both the defendant, didn’t he?

Sidney A. Schwartz:

By characterizing in a joint tortfeasor, that is correct, Your Honor.

I might indicate in answer to Mr. Justice Burton’s question that the Court of Appeals said in dealing with the question of negligence and unseaworthiness and I’m referring at page 326 stamped, 326 of the record, judgment on the action for indemnity over was awarded to Ryan.

We think this error, the trial court found Pan-Atlantic guilty of negligence and that its cargo officer did not properly perform his admitted duty to supervise the safe and careful loading of the vessel.

And then up above at the very outset, Judge Frank writing for a unanimous Court of Appeals says there was ample evidence to support a jury — jury verdict on either or both negligence or unseaworthiness.

So that both courts, the District Court and the Court of Appeals have both held that the record shows Pan-Atlantic to be both negligent and to have furnished an unseaworthy vessel and the jury so determined as far as Pan-Atlantic was concerned.

Now, the first question as I indicated that the petitioner raises here, the construction of the statute and Your Honors will find the wording of the statute at page 3 of the petitioner’s brief.

And for practical purposes, the part of the statute that is important is the first half of the statute which reads as follows.

Exclusiveness of liability, the liability of an employer prescribed in Section 904 — page 3 of the petitioner’s brief, Your Honor.

The liability of an employer prescribed in Section 904 of this chapter shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next to kin and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death.

And I might indicate that the — this very Section was recently before the Court of Appeals in Maryland in the Standard Wholesale Phosphate case.

And there, the Court of Appeals for Maryland said, “We think the appellant,” and that was the shipowner in that case, “Fall squarely within the definition of anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury.

It follows that his right to indemnity or contribution is foreclose by the Act and hence, the employer cannot be impleaded.”

Sidney A. Schwartz:

And I respect —

Where is that citation?

Sidney A. Schwartz:

That citation is 193 Maryland.

193?

Sidney A. Schwartz:

193 Maryland, starting at page 20 and the quotation from which I just read is found at page 30.

It’s found, Your Honor, in the reply briefs that the petitioner filed which is in a yellow-black to that of the United States as amicus and it’s found at pages two and three of that particular brief is also referred to by citation without quotation in the very main brief at page 17.

I might indicate to the Court that the United States Court of Appeals did not pass on the construction of the statute when it was presented to them in this particular case but by virtue of the result that it arrived at in granting indemnity over in favor of Pan-Atlantic as against Ryan and reversing Judge Inch’s determination, it must be assumed that they did not agree with the petitioner’s contention with respect to the construction of the statute and went to the factual situation in order to determine whether Pan-Atlantic was right or wrong in their position.

(Inaudible)

Sidney A. Schwartz:

That is correct, Your Honor.

We did and we argued the very cases of the Court of Appeals for the Second Circuit which had preceded this Palazzolo case in which Judge Hand — Learned Hand and others had indicated in dictum or in holding that the statute, which we cited and comparable compensation statutes reading as does the Longshore Act, should be construed according to their plain terms and in one of the cases so that it cannot be — it can’t be argued that the question of contribution in contrast to — to indemnity was posed.

We have a situation where the record will show, it’s Gill versus United States where the record will show in that case that the only thing that the shipowner sought there was indemnity and not contribution.

And in disposing of the petition there for indemnity, the Court of Appeals for the Second Circuit merely said the dismissal of the cross libel against Turner and Blanchard, who in that case was the employer and who was the respondent impleaded which paid libellant under the provisions of the Longshoreman’s and Harbor Workers’ Compensation Act was without error 33 U.S.C.A. Section 905.

And then they cite their own case, American Mutual Liability Insurance Company against Matthews wherein I represented the shipowner and arguing for a right of contribution and the right of contribution was denied.

And there, the Court of Appeals in denying contribution said, “To impose a non-contractural duty of contribution on the employer is pro tanto to deprive him of the immunity which the statute grants him in exchange for his absolute though limited liability to secure compensation to his employees.”

And Chief Judge Learned Hand in a concurring opinion said that the statute was a release and he said it in these words, “And the reason why I think it should be so construe is that it has imposed upon employers an absolute though limited liability in exchanged for a release from the preceding unlimited liability, conditional upon negligence.”

Felix Frankfurter:

Suppose — suppose that Judge Learned Hand saw (Inaudible) and I suppose you don’t say that (Inaudible)

Sidney A. Schwartz:

I think that maybe true except with this qualification, Your Honor.

Here we have no aid, the legislative intent so far as can be disclosed by research and this Court has indicated where a statute is clear and unambiguous in its language if they —

Felix Frankfurter:

I can’t imagine the words — imaginable interpretation of facts and this Court (Inaudible) again and again (Inaudible) the statute.

The statute is important, I’m not saying it in closing.

We do not reach that — Judge Learned Hand wisely would say again and again and again, it subside in the word of any and all and every — all of those court words in themselves contains a piece of ambiguity (Inaudible)

Sidney A. Schwartz:

I think we — we didn’t get to this anomalous result, Your Honor, that in this particular case where we have concurrent negligence not only as Pan-Atlantic Steamship Corporation had been held liable for negligence but also Ryan.

We have the anomalous result in construction of a statute where, by virtue of that concurrent negligence, Ryan Stevedoring Company now has an unlimited liability in this case $75,000 and whereas if they were solely negligent in contrast to being negligent with someone else.

This man would have been relegated to compensation where the maximum liability under the compensation statute would have been $11,000.

Felix Frankfurter:

You said the person can’t get any if he is arguing such a case.

(Inaudible)

Sidney A. Schwartz:

No, it’s not exactly true, Your Honor.

Felix Frankfurter:

These are all (Inaudible)

Sidney A. Schwartz:

No, I should tell —

Felix Frankfurter:

Aren’t they?

Sidney A. Schwartz:

Their — their — the stocks are owned by Waterman Steamship Corporation but I should indicate this to Your Honor, there is an insurer of Pan-Atlantic Steamship Corporation.

There is another insurer of Ryan Stevedoring Company.

Now, I don’t mean to argue outside of the record but it’s in the briefs because it was post in my —

Felix Frankfurter:

(Inaudible) deciding this case except the question of how the insurance came to play.

Sidney A. Schwartz:

Well, by — for a practical result and maybe that all of them will decide to place their insurance in one company but I don’t think that’s the question for a decision here.

I think here, we have a case where there is $25,000 coverage for Ryan Stevedoring Company on the claim over now and the judgment over of $75,000, so that Ryan Stevedoring Company had an uninsured liability of $50,000, which they must pay to Waterman’s insurer, not to Waterman but to Waterman’s insurer.

Felix Frankfurter:

All of this is irrelevant to my (Inaudible)

Sidney A. Schwartz:

Right, I’m contending for the construction of the statutes so that an employee now as has been done in this case cannot, by bringing an action against a shipowner, really recover from his employer because the shipowner really becomes a conduit who in turn pays the employer’s money over to the injured longshoreman, a liability beyond what the statute contemplated to be the liability of the employer if it was solely negligent.

Now, here we come off with a worst deal, here we’re as negligent as the shipowner and here we have a liability of $75,000 in contrast to what would have been our liability was — was that simply our own negligence which caused the result.

It seems to me that we arrived at an anomalous situation as far as dollars and cents is concerned when we talk about approximate cause and when we talk about the legalistic behind this situation.

Now, in so —

(Inaudible) if you have two liabilities (Inaudible)

Sidney A. Schwartz:

That’s true, Your Honor, and the cases so hold.

But the cases never have granted a recovery over in a situation of a claim made as has been made here, where the trier of the facts does not look at the relative delinquencies of the parties.

Now, in this particular case, the trier of the facts was the trial court sitting without a jury.

He determined that the parties had actively and affirmatively participated in the in the tort.

Therefore, merely because we owed a duty to Pan-Atlantic Steamship Corporation, the stevedore, their vessel properly despite the fact that their own cargo mate and their own expert was in actual supervision and control throughout by his uncontradicted testimony.

Here, we shouldn’t, without looking at the qualities of the torts of these particular parties, be called upon to pay them when they stood by through there own supervising officer and said in essence, “I see how you are loading this ship.

Its perfectly all right as I see you loading it now.

But if it should be determined hereafter that someone says that this ship was loaded improperly then as far as I’m concerned, I’m entitled to indemnity from you and I’m going to pull my hands and not stop you from doing what you’re doing even though I think its proper.”

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

That is correct, Your Honor.

That is correct.

Well, as Your Honors see, these intwine themselves one with the other.

The second point is a point that deals with a question which maybe an academic question depending upon what Your Honors do with what I assumed in logical presentation was the first point, namely, the statute and that is whether under the general maritime law in view of this Court’s decision in the Halcyon case where you said that there is no contribution between joint tortfeasor whether there exist a right of indemnity under the general maritime law in view of the fact that Mr. Justice Holmes in the Erie case, which is cited in our brief, said that indemnity — no, that contribution is partial indemnity and where other courts have said that indemnity is only an extreme form of contribution.

Now, unless these are just empty words, we have a situation where this Court in Halcyon case, which I have cited in my brief, has said that there is no contribution between joint tortfeasor.

If that be — be true and there is no legal distinction between indemnity and contributions then it should naturally follow that there should be no indemnity between joint tortfeasor.

Supposing your — supposing the stevedore’s claim had rested entirely on — on unseaworthiness theory and the jury has brought in a verdict solely only on a complaint of that kind or a special verdict exonerating the shipowner’s of negligence if it find the stevedore on unseaworthiness.

What would be your position then?

Sidney A. Schwartz:

I think the trial court would still have to look at the testimony that had been adduced in the case.

Sidney A. Schwartz:

And that testimony from the cargo mate where he had testified as to his overall supervision and control and — and what he saw at the point of loading and at the point of discharge and still he would have to — the trial court would have to look at the relative delinquency even though the jury’s verdict was predicated solely on unseaworthiness because the best that you can get out of an unseaworthy condition is that there was a defective condition irrespective of whether it was known to the shipowner or not.

But in order to determine the question of indemnity over, the trial court would have to take the whole record into account and he would be confronted as he was here with the cargo mate’s testimony.

Even though the jury had found no negligence?

Sidney A. Schwartz:

When you say no negligence, Your Honor means that they are limited solely to unseaworthiness?

Both issues are submitted there as to bring in special verdicts.

Sidney A. Schwartz:

And then they — then they find that there’s no (Voice Overlap) —

Then they reject the claim of negligence and find for the stevedore on the theory of unseaworthiness which is without fault.

Sidney A. Schwartz:

Then I think the trial court might be bound and there would be a right of indemnity over because there he would be bound by the finding made by jury that Pan-Atlantic Steamship Corporation had not been negligent.

Felix Frankfurter:

Why would there be a — right of indemnity (Inaudible) the statute.

Sidney A. Schwartz:

I say if you don’t get to the — I meant to say, if you don’t get to the statute.

My — my argument on the statute is you’ll never get to the other questions unless you hold that the statute does not mean what it said.

If Your Honors come to that conclusion that it is not an exclusive liability insofar as Pan-Atlantic Steamship Corporation is concerned because they are not embraced by the word anyone otherwise entitled, then you get to the other questions.

Felix Frankfurter:

You mean, we must stop (Inaudible)

Sidney A. Schwartz:

Well, I — I’m trying to think, if Your Honor’s determined — if Your Honor determined that — that the Circuit Court was right in it’s appraisal of the evidence insofar as the relative delinquencies of the parties is concerned, they had a right to reverse the trial court, then Your Honor’s would say the right of indemnity exists as a matter of fact.

But what would you do with the question of law?

It’d have to come to that question then whether the statute was still a defense despite —

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

Well, if you agree with Judge Hand, that’s correct, but I assume —

Felix Frankfurter:

(Inaudible)

Sidney A. Schwartz:

— I assume the other situation.

If Your Honors —

Felix Frankfurter:

I think we must take it that way.

Sidney A. Schwartz:

No, I —

Felix Frankfurter:

I don’t quite understand why you don’t (Inaudible)

Sidney A. Schwartz:

I think as I — as I attempted to indicated to Your Honor that as I saw the logical presentation of this, if Your Honors got to review that the Court of Appeals was right, namely, that the fact show that they should be indemnity over, you’d still have before you the question of the construction of the statute.

Felix Frankfurter:

What about — about that?

Sidney A. Schwartz:

So that in order to eliminate the question entirely, I assumed that logically the question of the construction on the statute should come first.

Felix Frankfurter:

(Inaudible)

You’d be happy if we took those against you?

Sidney A. Schwartz:

Well, dollar wise we’d came out all right, but I don’t know that that’s the solutions to the entire problem, Mr. Justice Black.

Felix Frankfurter:

You’re replying as to the real abstract question of having the statute (Inaudible)

Sidney A. Schwartz:

It’s not an abstract question, Your Honor.

I — I — for one and I’m just one voice crying —

Felix Frankfurter:

I mean in this case, your concern is not only committed — printed on (Inaudible) is that it?

Sidney A. Schwartz:

I’m not concerned about it, but I’d — I’d like the question to be answered as far as the statute is concerned.

Felix Frankfurter:

That’s what I mean —

Sidney A. Schwartz:

If Your Honors don’t agree with us and pass to the factual situation dollar wise, I may still come out all right in this case.

But as I say, there are many cases.

I have at least 17 in my office and there are 117 —

Felix Frankfurter:

Suppose you were arguing another case besides this case?

Sidney A. Schwartz:

No, I’m not arguing of a case.

I say the principle permeates all these cases, Your Honor.

There are — there are 117 cases which we presented in our petition for rehearing where the parties are aligned as the parties are here where the same questions are being urged.

And I say that simply in the two districts in New York.

I would like to reserve the rest of my time with respect to rebuttal.

Earl Warren:

Mr. Behrens.

Edward J. Behrens:

If it please the Court.

I should like in a preparatory way to say that I am here fundamentally to discuss the peculiar facts of this peculiar case.

I am mindful of the broad sweep of some of the problems which could be here, some of the problems that maybe in the other cases.

But we have here first, a unique factual situation which must be fully appreciated before we can approach these problems that may exist in other cases.

I say it’s unique because ordinarily, this whole problem of whose insurance company pays the loss or who pays the loss if they have enough insurance is taken care of by the contract between the ship and the stevedore.

That’s the ordinary case.

Your Honor’s have had that type of case here, in Porello, to determine how broad is this indemnity provision of the agreement.

These are businessmen who are dealing with an everyday problem, who shall bear this loss in the event that the stevedore does it for a job.

But here we had wholly owned subsidiaries of a common parent and so they didn’t deal with one another as we have in the usual case.

There were two letters exchanged in two office memoranda.

They did comprise the contract all right and a written contract but all they covered were rates and ports where stevedoring services where to be performed.

That is the general situation as it affects our clients.

We are wholly owned subsidiaries of this common parent and therefore the informal written agreement.

I point to the agreement only to indicate that we are not in any field of quasi-contract.

Edward J. Behrens:

We have a contract here and we are in the question of implied contract as the Court of Appeals for the Second Circuit wrote here.

What is the first problem factually?

What is the nature of the claim that the injured longshoreman made against us the shipowner?

What was his complaint?

Now, that is pointed up with peculiarly by the question put by Mr. Justice Harlan concerning seaworthiness because he made both claims.

He did claim that when this cargo with rolls of paper was stowed aboard this vessel by Ryan at Georgetown, South Carolina, they had not put adequate chocking underneath it.

In other words, as each paper roll was brought and rolled along and put into its place in the hold of the ship, something had to be put under it to keep it from rolling back.

And his complaint was that the chocks put underneath weren’t adequate to hold it, so that when —

Mr. Behrens, who’s supposed to furnish the chocks or this wedges (Inaudible)

Edward J. Behrens:

The chocks or wedges would be ship’s gear because the mate testified that there were chock — chocks, these chocks both aboard the vessel and on the dock at Georgetown.

That was never disputed.

Was there any —

Edward J. Behrens:

Now —

— conflict in the other in the evidence as to — are not being chocks at the time.

Edward J. Behrens:

Oh, yes, the longshoreman testified that what had been used instead of the chocks, but the availability of the chocks was not disputed.

It was the use of them.

They testified that pieces that were two small had been put underneath.

I thought that some longshoreman testified and is it customary for this company to use other types of (Voice Overlap) —

Edward J. Behrens:

Well, one — one of the longshoreman testified that it was usual in his experience for this to be chocked by this company with dunnage instead of this sort of chock that the mate described.

In other words, it was the conflict in evidence that there was.

He said the mate — and this is I think important because of the factual statement which Mr. Schwartz has presented.

Well, that’s what the Judge Hand said with determining —

Edward J. Behrens:

Yes, the mate — first of all, when they talk about this mate, that mate was on watch for 4 of the 20 hours that the vessel took this cargo.

Now, he wasn’t there all of the time.

That’s the first point in writing my brief because I suspected there was going to be a lot of talk about what the mate did and he didn’t do.

I very carefully keyed to the record at pages 4 and 5 of my brief exactly what the mate did do and this is what he did.

First of all, to recreate that picture, there was this cargo being loaded simultaneously into five different hatches.

One mate, the loading took 20 hours.

This particular mate that Judge Inch talks about was there for 4 of the 20 hours.

Now, what did he have to do?

Edward J. Behrens:

Well, he couldn’t spend all of his time in any one hatch.

This happened — to have occurred in number three, but he had five hatches to look at.

He had no authority to direct any of Ryan’s men in the manner of loading the cargo and did not supervise the detail of the stow.

This question of supervision is just the other way around in this record.

He didn’t supervise it, indeed he couldn’t.

He testified and nobody questioned him that there were proper chocks on the vessel and the dock.

Now, the mate said he’d seen them use proper chocks.

Came the witnesses for the injured longshoreman and they said, oh, no, this weren’t properly chocked.

The chocks underneath them weren’t adequate chocks.

But now, from time to time during the loading of this cargo, he couldn’t know as a matter of fact and as a matter good sense whether Ryan had chocked them or he hadn’t, why, because as each roll was put in place and the chocks are put under it, you roll the next — roll along side of it, you can’t see whether its chock now or not.

This mate was in and out of five holes, presumptively, the only one on watch for 4 of the 20 hours and that is the activity which Mr. Schwartz constitutes as some active affirmative negligence which even Judge Inch didn’t find.

And I’ll tell Your Honor what Judge Inch did find and why this question became so important as to unseaworthiness and negligence.

The judge removed from consideration by the jury anything that happened at the time of unloading.

Whatever Ryan did or didn’t do at the time of unloading was removed and the only question that went to the jury was whether the stow at Georgetown was good or bad.

That is what the original plaintiff had asserted.

That is the issue we had tried and that was the issue the jury was to pass on.

There was no issue between Mr. Schwartz’s client and mine.

I called no witness against him.

He called no witness against me.

We stipulated the facts.

The quarrel was between the injured longshoreman and the vessel owner and the only question was whether that stow at Georgetown was good or bad.

Perhaps you say it was good.

Edward J. Behrens:

I beg your pardon?

To me (Inaudible) he testified it was good.

Edward J. Behrens:

Well, he testified it was good as far at he was concerned, as far as he knew it was good.

The longshoreman testified it was bad and —

Edward J. Behrens:

That’s right and that problem was resolved against us.

And the jury decides or when to say that it’s —

Edward J. Behrens:

Oh, that is a fundamental fact in this case.

It has been decided by a jury that the stow was bad.

Edward J. Behrens:

Now, the next question comes if the stow was bad, where do we get by separating negligence and unseaworthiness?

That was one of my big complaints before the Court of Appeals for the Second Circuit and one of the things that I thought required the result that we did achieve there.

We are all familiar with a difference between negligence and unseaworthiness.

This Court has written of course unseaworthiness is the species of liability without any fault.

And certainly, negligence has in its essence some fault.

When the judge charged the jury here, he put those two concepts into a pot.

He intermingled them and he intermingled them so that no lawyer and certainly no layman could separate them and he threw that issue to the jury as one whole problem.

And when the jury verdict came back, holding the stow was bad because that was the fact issue, then when it came time to find out about my rights over against the stevedore then he started for the first time to separate negligence and unseaworthiness.

And to go on this theory of negligence which has now been characterized as active or something of that type in order to put a label.

He made no fact finding we were joint tortfeasors.

He put a legal label upon an admitted set of facts.

But I thought of course he ignored the contractual relationship between us.

The fact that we had a binding agreement was utterly ignored and so he went exclusively to find out if somehow or rather he could put negligence on us, although when he gave it to a jury, he threw it to the jury in one piece, negligence and unseaworthiness intermingled.

That was one of my first and greatest and sincerest complaints in the Court of Appeals, that with that posture of the case, it really wasn’t fair.

It was almost like changing the rules in the middle of the game.

If there wasn’t any difference between unseaworthiness and negligence as far as the plaintiff against me, now why should you start to chop him in half when you look for my claim over — against the stevedore?

Now, what did Judge Inch actually find?

He found the mate failed to discover that these people had done a poor job.

That’s what he held against us and that’s all he held.

And here’s what he wrote that the cargo officer in the exercise of reasonable care should have discovered and corrected the condition.

In other words, we didn’t find out that these people would do — had done a bad job when they have been paid to do a good work.

When we’ve got into the Court of the Appeals, the Court unanimously could find two basis upon either one of which we were entitled to have in fact whatever this accident had caused us.

One basis might be called court, the law of active and passive negligence.

The theory having been expressed in the Second Circuit and in other courts on many occasions that if the conduct of two persons has contributed or caused an event and the one has been the primary or active or substantially responsible and the other merely negligent in a negative or passive way that the Court will work out contribution and the hold the one harmless and for whom it — him who was negative and who failed to do this and failed to do that to reproof his damage from the one who is active.

But I never briefed substantially or urged in this Court a great deal on that subject because the Court of Appeals found something I thought was so unimpeachable that if Your Honor’s could find one basis of soundness for the conclusion they had reached that that would dispose the problem and that’s the contract.

I think it’s so sound but there is no brief in opposition to the point.

The point is simply this, that if I hire an expert to do a job by his — hire someone because of their peculiar skill or knowledge, it’s understood they’ll do a good job.

Now, there isn’t anything particularly maritime about that, it lies to affairs on the land as well as on the sea if I hire a man to repair the raptures in my house so the roof won’t fall in.

I don’t have to put down in lawyer’s language or with seals or ribbons that he will do a good job.

That’s an implied part of his undertaking.

Edward J. Behrens:

So in this case, it was an implied part of the undertaking that Ryan as a special, let’s say, stevedore embarked upon that they do a good job in stowing the cargo.

Now, they did a bad job.

The juries found it.

The stow was poor.

They breached their contract.

I don’t think they deny it and so — well, if they come here to do is to confess and avoid.

Yes, we breached our contract but because we fulfilled our obligation to our employees, we — we don’t owe you anything.

Because of 905 of the Longshoremen Harbor Workers’ Act, we’ve been good to our employees and therefore we can’t be held liable for breach of contract or a suit for rent or such other things.

What the whole argument fails to see is that there are these two separate and distinct lines of obligation to which Mr. Justice Reed referred a few moments ago, that as an employer, Ryan did oath to Palazzolo, an employee, certain obligations and put to us in the status of contract with us being the other point, they owed us some obligations too.

And when they satisfied their obligations to Palazzolo, what sense is there for them to say, “We owe you nothing.

We owe our landlord nothing.

We owe no one else in the world anything.”

Because the effect of the argument here about 905 is that this immunity runs in favor of the whole world that a stevedore procuring compensation to his employees can’t be guilty of breach of contract.

Now, that’s the basis of the first argument.

What’s wrong with it?

Mr. Justice Frankfurter has referred a few minutes ago to looking at a statute.

I’m not reading it too literally.

I say let us look at the history of this statute.

Let’s look at the history of this statute in this Court, what had this Court done that caused this statute to come into being?

Back in 1913, an attempt was made to bring a longshoreman in under the New York State Workmen’s Compensation Law.

It was as far back as that.

When the case came up here, this Court held that you couldn’t do that.

That longshoremen where engaged in the maritime work.

They work to be governed by maritime considerations and it is our maritime policy that there’d be uniformity, that you couldn’t apply a state law of workmen’s compensation whether it was promulgated by one state or another or a fourth or a fifth.

And so in the Jensen case, this Court held that wouldn’t be constitutional.

You couldn’t do it that way.

So Congress tried to get a workmen’s compensation law in for longshoremen and they tried it in this way.

They amended the Judiciary Act, a couple of years later, to give jurisdiction to admiralty courts of claims by injured workmen under state compensation law.

The constitutionality of that was challenged and this Court said, “No, you can’t do it that way.

You can’t blank in it 48 different state compensation laws, you’ve got to have uniformity.”

Edward J. Behrens:

So Congress tried to get another workmen’s compensation law through for longshoremen.

Mind you, we’re talking about workmen’s compensation and nothing else.

They put in the so-called Mills amendment, again trying to blank it into a federal system, the different workmen’s compensation laws of the 48 states.

And again this Court said, “You can’t do it that way.”

And then this Court said how it could be done.

Congress would have to enact a workmen’s compensation law that would be a uniform application throughout the United States and with that history and that background of attempts to put into effect the workmen’s compensation law, finally in 1927, this Longshoremen’s and Harbor Workers’ Act came into effect.

If it was anything more than a definition of the rights and remedies of employer and employee, there wasn’t anything in its history that would indicate that fact.

Now, we are interested in the statute.

What did the — they say about in the Congress?

Any Congressman have any different ideas as to what this statute meant?

And the answer is that the petitioner admits there wasn’t a word on it at anytime while this was going on in Congress for years that would support the idea that they were doing anything except dealing in the field of employer-employee.

And certainly, I think that any of those legislators would be amazed to hear that this legislation between employer and employee is now sought to be some sort of — have some effect upon the rights of a contractor, landlord and tenant or who knows what when all that Congress said — about to do was to put a workmen’s compensation law into this maritime field.

Now, so far as the generalities of the situation are concerned as much has been said about Hydra-headed litigation, that there’s something wrong here, that something about the conduit theory.

That indirectly something is being done that can’t be done directly.

I — I’m trying to admit that at first blush sometimes that looks that way.

But actually by our use of third-party practice, I don’t think that all procedural mode of operation can obscure the two lines of rights which are involved here.

Indeed, the Court of Appeals in New York many, many years ago, and to let the problem with our own workmen’s compensation law and which indeed is the basis of the Longshoremen and Harbor Workers’ Act.

It’s modeled after our New York law.

They held that that won’t bare analysis that after all an employee has rights against his employer and those are solved by the compensation law.

But when it comes to the obligations of that man, no longer as an employer but as a contractor, he’s got to stand on his own feet and he can’t point to a satisfaction to these other obligations.

I suppose that if the injured person here has been an employee of another shipping company, nobody would contend that the statute would bar claims against Ryan on indemnity?

Edward J. Behrens:

In other words, if he had been an employee of —

Of another shipping company, he’s not been Ryan employee.

There wouldn’t be any question with the statute barring that kind of a claim.

Edward J. Behrens:

(Voice Overlap) —

Your position is that the circumstances that he is an employee of the same company doesn’t change the nature of the —

Edward J. Behrens:

Of my claim.

— of your claim.

Edward J. Behrens:

No, my claim would be the same whether he’s their employee or not.

Indeed, I think the — one of the clear instances of that is supposed but instead of the Court of — I — I have just this thought.

Edward J. Behrens:

Suppose that it wasn’t Palazzolo who got hurt at all but that this stow fell down because they did a bad job of stowing it and the cargo was damaged.

And now, comes the owner of the cargo, to me the shipowner, and says, “You must pay the damage.”

And we pay him damage.

Now, we come back to the stevedore and say, “Well now, really you did it.

You breached your contract with me, pay me damage.”

Certainly, I don’t think we’re going to talk about workmen’s compensation law, nothing like this case.