Baird v. Daly

The different grounds o>n which the court below granted the motion for a nonsuit embrace, substantially) these two propositions : .1st. That the plaintiff had no-cause of action against the defendant because there was no privity of contract between them; and, 2d. Because the case was exclusively within the jurisdiction of the United States courts. Heither of them is well founded.

1st. It is true that the defendant’s agreement was made with Cavanaugh alone, and that it did not obligate him to the performance of “ any contract duty to the plaintiff/’ as is stated in one of those grounds; but that fact did not justify him, in the execution of that agreement, to do- his- work so-

2d. Assuming that the plaintiff’s cause of action was cognizable" in the courts of the United States, their jurisdiction was not exclusive. The learned judge, who delivered the opinion of the General Term of the Supreme Court, held, and properly, that the case came within the saving clause of •the ninth section of the judiciary act of 1789, passed by Congress (1 U. S. Stat. at Large, 76 and 77) “ saving to suitors, in all cases, the right to a common-law remedy when the common law is competent to give it; ” and conceded that the courts of this State had jurisdiction of it, unless the act of Congress entitled “ An act to limit the liability of ship-owners and for other purposes,” passed March 3d, 1851 (9 U. S. Stat. at Large, 635, 636, and Brightly’s Digest, p. 834)’is applicable to it. It is sufficient, in support of such conceded jurisdiction, to cite the case of Steamboat Company v. Chase (16 Wallace, 522, etc.), decided in December, 1872, without referring to previous cases to the same effect; and the- following considerations will show that the act referred, to by him does

“ § 4. If any such embezzlement, loss or destruction, shall be suffered by several freighters, or owners of goods,, wares or merchandise, or any property whatever, on the same voyage, and the whole value of the ship or vessel and her freight for the voyage, shall not be sufficient to make compensation to

The second section provides that no owner or master of any ship or vessel shall be liable for certain enumerated valuable articles of property, without a specification in writing of the true character and value thereof furnished by the shipper, and an entry thereof in the bill of lading therefor. The eighth section declares that the act shall not apply to the owner or owners of any canal boat, barge or lighter, or to any vessel of any description whatever used in rivers or inland navigation. Other sections provide that a charterer of a ship or vessel shall, in certain cases, be deemed the owner thereof, within the meaning of the act, and that the exemption of the owner shall not affect the liability of the master, or mariner, or any parties actually guilty of negligence or wrongful conduct.

There is nothing in the third or fourth sections, above set forth, that can be construed into a declaration or enactment that the rights of action which a party may have against a ship-owner shall be enforced in any particular court, or that the remedy for the enforcement of such right by the injured party was intended to be in any manner changed; but the general object and intent of the provisions contained therein

It follows that the judgment, entered on that order, must be reversed, and a new trial is granted, costs to abide the • event.

This action is brought to recover for an injury done by the unskillful management of a tug belonging to the defendant, which was engaged in towing a scow, on which were certain cattle belonging to the plaintiff.

The questions to be discussed here may be resolved into three. (1.) Can the plaintiff, under the facts of the case, recover in a common-law action provided that can be maintained under the provisions of the United States Constitution % (2.) Has the Supreme Court of ¡New York jurisdiction over the case, the injury having occurred on the River St. Lawrence ? (3.) Does the act of Congress, of the year 1851 (5 U. S. Stat. at Large, 635), apply to the case, and, if so, do its provisions oust the court of its jurisdiction ?

(l.j The facts of the case show that the plaintiff employed one ¡Nicholas Cavanaugh, who was the owner of a sea-worthy scow, to transport for a fixed price his cattle and horses from

The ease is here presented of an owner of goods intrusting them to a bailee to do work upon them, and the bailee, with the knowledge and privity of the owner employing another person to aid him in accomplishing the stipulated work, and by his unskillful conduct causing injury to the owner. Such a state of facts gives the owner a right of action. It is his property which is injured, and he is entitled to redress. True, the bailee having a special property may also have his action. A recovery, either by the bailor or the bailee, is a bar to an action by the other party. (Green v. Clarke, 12 N. Y., 343 .) In that case the defendants were sub-contracting carriers, and it was contended, on their behalf, that the owner could not sue for want of privity, as he was not a party to the contract between the original carrier and the sub-contractor. The court rejected this view, holding that the question of privity was immaterial. Gardiner, J., said that if the bailee had sued arid recovered he would have held the ainount recovered in trust for the owner; and to insist that the bailee should sue was simply maintaining that a dry trustee should sue rather than the cestui que trust. It was, further, his view that the owner had such an interest in the sub-contract that he might, at his election, affirm it and make the sub-contractors liable on their contract as though it had been made

(2.) The next .inquiry is whether the Supreme Court has jurisdiction over a contract of this kind. This depends upon the jurisdiction of the United States courts as -conferred in the Constitution. The judicial power of the United States extends to all cases of admiralty and maritime jurisdiction. There can be but little doubt that this language includes the present case. After great discussion and much vacillation of opinion it may now be considered as law that the admiralty jurisdiction of the District Court of the United States extends, by force of the Constitution and of the judiciary act of 1789 (§ 9), to the great lakes as well as to the St. Lawrence, connecting them with the ocean. The leading case of De Lovio v. Boit (2 Gallison, 398) is now accepted law. In the case of contracts the test of jurisdiction is not necessarily whether the contract is to be performed on navigable waters, but whether the subject-matter of the contract is maritime. (Insurance Co. v. Dunham, 11 Wall. [U. S.], 1.) The carriage of passengers on navigable waters is a maritime contract. (The Moses Taylor, 4 Wall. [U. S.], 411.) The cases are extensively collated and thoroughly discussed in a learned article on admiralty jurisdiction in 5 American Law Beview, 581.

The present contract was, according to these and other authorities, a maritime one, over which the United State court has jurisdiction. (Moore v. American Transportation Co., 24 How. [U. S.], 1.) This proposition, however,

On the other hand, jurisdiction over the person of one who has violated a maritime contract or committed a maritime tort is not exclusively vested in a court of admiralty. From time immemorial, questions of this kind have been entertained in the English common law courts. They could have been instituted in the State common law courts when the United States Constitution was formed. Proceedings of this character are expressly reserved to the State courts by section 9 of the judiciary act of 1789. (1 U. S. Statutes at Large, 76.) The reservation is still more clearly expressed in section 1 of the act of February 20, 1845, concerning the admiralty jurisdiction upon the great lakes, and the navigable waters connecting them. The words of that act are: “ Saving to the parties any concurrent remedy which may be given by thé State laws, where such steamer or other vessel is employed in the business of commerce or navigation.” Though this language is more explicit than that of the act of 1789, yet its purport is the same. The two statutes show unmistakably the intent of Congress to reserve to suitors their remedies in State courts, except so far as to carry out the law of 1851, to be hereafter considered. It is, accordingly, in general, a matter of election with an injured party, whether he will ask relief in a State or a United States court, and the defendant cannot object to a prosecution in a State court on the ground that the cause of action is, in its nature, maritime, so long as the

This course of reasoning, though applied in the case cited to marine torts, is equally applicable to maritime contracts. The legislation of Congress, on the whole subject, shows that it was intended in personal suits to allow a party to seek redress in the Admiralty Court, if he saw fit to do so, but not to make such a course compulsory in any case where the common law is competent to give him a remedy. Tried by this test, the plaintiff, in the present case, had a right to proceed in the State court, and having made his election to do so, that court had jurisdiction. (See, also, Leon v. Galceran, 11 Wallace [U. S.], 185; 5 Am. Law Rev., 582, 583, 618.)

(3.) The next point to be considered is, the effect of-the act of March 3, 1851. (5 Statutes at Large, 635.) The section bearing upon the point presented in the case at bar, is the third. Its terms are as follows: “ The liability of the owner or owners of any ship or vessel, for any embezzlement, loss or destruction by the master, officers, passengers, or any other person or persons, of any property, goods or merchandise, shipped or put on board of such ship or vessel, or for any loss, damage or injury by collision, or for any act, matter or thing, loss, damage or forfeiture, done, occasioned or incurred, without

Assuming that the act of 1851 is applicable to the case at bar, it falls within the third of these classes. The negligence causing the injury, it is conceded, occurred without the privity or knowledge of the owner. The act of 1851 is founded on a great rule of public policy. It was passed in order to encourage the investment of capital in ships. The main intent of Congress was to introduce into the law of shipping the principle of “limited liability,” which is such a marked element in the law of corporations, distinguishing them from the usual individual or partnership responsibility of owners. The ship-owner must act through agents who might, under the ordinary rules of law applicable to agency, subject him to unlimited liability. The statute, for his protection, allows him to put at risk a limited amount of his capital, as a stockholder in a manufacturing company may do by the general rules of law governing corporate stock. This principle, however, does not of itself affect the jurisdiction- of a State court to entertain an action against a shipowner for damages. In many cases, the injury done by the agents of the owner would not be of such a nature or extent as to bring the statute into practical operation. In cases where the loss of the injured party is much less than the value of the ship, an ordinary action for damages will naturally be resorted to. There is no reason why it should not be, unless there is something in the other sections of the act of 1851 which necessitates a different conclusion. The only other section which could affect the case is the fourth. The

There is nothing in this section to oust the State court of its jurisdiction. It does not begin to operate until there is some affirmative act by a party interested to avail himself of the benefits of the statute. The section requires “ appropriate proceedings” to be instituted in a competent court before there can be any apportionment. Before the ship-owner’s liability is terminated he must, as has been seen, make an assignment of his interest to a trustee, or do some equivalent act. Neither of these acts may be necessary or expedient. In that ease, no reason can be given for depriving the State court of a jurisdiction which, without the statute of 1851, it would plainly have. The correctness of these general views is fully sustained by the case of Norwich Company v. Wright (13 Wall. [U. S.], 104). That case gives construction to a number of doubtful questions under the act of 1851. It points out the mode of proceeding in case an action for damages is pending in a State court against a ship-owner, where such owner seeks to avail himself of the provisions of the statute. He should file a libel in admiralty, with a payment into court of the value of the ship and freight, or make an assignment of them to a trustee. He may then plead these facts in the State court in bar of the action, or he may procure an order from the Admiralty Court restraining the further prosecution of the action. (P. 125.) There is no hint here, that the State court

Reference should also be made to the fifty-fourth rule in Admiralty. This owes its existence to the discussions evoked by Norwich Company v. Wright (supra). (See the rule in 13 Wallace, XII.) It provides, in substance, that when any case within the act of 1851 arises, if the owner desires to claim the benefit of the limitation of liability provided for in the act, he may file a petition in the proper District Court, setting forth the facts on which the-limitation is claimed, and praying proper relief. An appraisement is then made of the value of the owner’s interest, and the amount is paid into court, or due security for such payment given, or, at the owner’s election, an assignment of his interest is made to a trustee, according to the fourth section of the statute. The District Court of the United States then issues a monition against all persons claiming damages for the embezzlement or destruction of property, or injury to it, to appear before the court and make proof of their claim, and, on the ship-owner’s application, an order is issued restraining the further prosecution of all suits against him. After this, all further proceedings will be had in the United States court, the property being applied by it to the payment of the respective claims. This rule shows, in the clearest manner, the opinion of the Supreme Court of the United States, that the act of 1851 does not of itself deprive the State court of jurisdiction.' There must be specific action on the part of the ship-owner, or other persons interested in the fund, invoking the aid of the statute, and after that has been taken, and in consequence of it, further prosecution in the State court is restrained.

The act of 1851 has received construction in Knowlton v. Providence & N. Y. S. S. Co. ( 53 N. Y., 76 ), but that decision does not bear so closely upon the facts of the present case as to require special notice.

All concur.

Judgment reversed.