The opinion of the court was delivered by: KAUFMAN
This action was tried on remand from the Supreme Court of the United States. The facts of this case are fully stated in the Court of Appeals decision at 1946, 153 F.2d 605 and in the Supreme Court opinion, American Stevedores, Inc., v. Porello, 1947, 330 U.S. 446, 67 S. Ct. 847, 91 L. Ed. 1011.
The litigation arose out of an injury to a longshoreman in the employ of American Stevedores, Inc. (hereafter 'American'), while working aboard a vessel owned by the United States. In the first trial of this action to another Judge, in this district court, the libelant obtained a decree against the United States. Because both respondent and respondent-impleaded were found to have caused the injury by their concurrent negligence, a decree against American in favor of the United States for one-half of the damage was granted.
The Court of Appeals affirmed the decree in favor of the libelant but increased the recovery. It reversed the decree granting the United States one-half contribution from American and granted the United States full indemnity based on a provision in a contract between the United States and American. A petition for rehearing limited to so much of the Court of Appeals decision as granted full rather than one-half indemnity was denied. 1946, 153 F.2d 609.
The Supreme Court affirmed the decree as to Porello but reversed so much of the decree as awarded indemnity to the United States under the contract and remanded the case to the district court for determination of the meaning of the contract.
The contract provision provides that: 'The Stevedore performing any service under this schedule shall be responsible for any and all damage or injury to persons and cargo while loading or otherwise handling or stowing the same, to any ship including its apparel and equipment, wharves, docks, lighters, elevators, cars and carfloats used in connection therewith, through the negligence or fault of the Stevedore, his employees and servants.'
The Supreme Court discussed the respective contentions of both parties to the contract as to the meaning of the provision and stated, 330 U.S.at page 457, 67 S. Ct.at page 853: 'On this record we cannot answer the contention of either party. As it stands the clause is ambiguous. Evidence might well have been taken as to the intention of the parties, but was not.'
Reference is then made in the opinion of the Supreme Court to the following footnote, 330 U.S.at page 457, 67 S. Ct.at page 853: 'American moved the Circuit Court of Appeals for an order allowing the parties to take proof and to submit it to the court as to the intent of the parties respecting the indemnity clause of the contract, or in the alternative for an order remanding the proceeding to the District Court for further hearing as to the intent and meaning of the clause. The Circuit Court of Appeals denied the motion.'
Elsewhere in its opinion, the Court stated, 330 U.S.at page 458, 67 S. Ct.at page 854: 'From the record it is not clear whether the District Court made any finding as to the meaning of the contract. We believe its interpretation should be left in the first instance to that court, which shall have the benefit of such evidence as there is upon the intention of the parties.'
With respect to the interpretation of the indemnity provision of the contract, it is glaringly apparent that the Supreme Court believed that the proffered testimony with respect to 'the intent of the parties respecting the indemnity clause' should have been heard in the lower court, for it is generally recognized that the most effective way to interpret an ambiguous contract is be ascertaining what the intention was of the parties to the contract. Without taking this proffered testimony the Court of Appeals for the Second Circuit placed the most reasonable interpretation upon the language used in the indemnity provision and then reached the conclusion which it did. In short, I believe that the Supreme Court was of the opinion that since the provision was ambiguous, the testimony offered by American with respect to the intent of the parties (and which the Court had every right to believe would be available to the district court) should precede the construing of the contract.
The Supreme Court stated that the contract provision had these possible meanings, 330 U.S.at pages 457-458, 67 S. Ct.at page 853:
(1) American shall indemnify the United States should the Government be held liable for damages solely caused by American's negligence.
(2) American shall fully reimburse the United States for all damages caused in any part by American's negligence.
(3) American, in case of joint negligence of the parties, should be responsible for that proportion of the damages which its ...