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June 28, 1954

In the Matter of the Petition of Paul F. WOOD for Exoneration from or Limitation of Liability

The opinion of the court was delivered by: GODDARD

This is a motion to dismiss the petition for exoneration from or limitation of liability, or, in the alternative, for an order allowing the claimants to pursue their common-law remedy in the state court and to extend the time for filing claims in the limitation proceeding.

The petition was filed on February 9, 1954, by Paul F. Wood, owner of the fishing vessel, Susan. It alleges that the Susan left New Jersey on December 4, 1953 to engage in commercial fishing with a crew of six and captain; that shortly after it sailed there were three storms with winds of gale velocity in the area; that the Susan disappeared with all hands; that it was seaworthy in all respects; that the loss was due to acts of God and perils of the sea; that petitioner was not in privity or knowledge of any condition which caused the disappearance; that the vessel is believed to be a total loss and there is no pending freight or any limitation fund; and it asks for exoneration from or limitation of liability.

 On February 10, 1954, Judge Noonan of this court ordered that a monition issue directing that all claims be filed before March 16, 1954, and that the institution of suits other than in the limitation proceeding be enjoined.

 This motion is made on behalf of the next of kin of the crew. They claim that the Susan was unseaworthy; that the petitioner had knowledge thereof; that they have causes of action under the Jones Act, 46 U.S.C.A. § 688, and the Death on the High Seas Act, 46 U.S.C.A. § 761 et seq., which they desire to pursue in the state courts; and that administrators of the estates of the decedents have been unable to be appointed thus far, and thus they ask extension of the time for filing claims.

 Claimants first argue that under Rule 51 of the Admiralty Rules, 28 U.S.C.A., the petition is premature because no claim has as yet been filed. Rule 51 provides that the petition shall state, among other things, 'what suits, if any, are pending thereon'. It recognizes that the petition may be filed before claims are made, and this has been held to be proper. The Alcyone, D.C., 50 F.2d 186, reversed on other grounds, In re Putnam, 2 Cir., 1932, 55 F.2d 73.

 Claimants also argue that, since there is no fund to be distributed, the court should dismiss the petition, or at least vacate the stay against suits in other courts. However, Title 46 U.S.C.A. § 183(a) provides that, if the owner qualifies for limitation, his liability 'shall not, * * * exceed the amount or value of the interest of such owner in such vessel, and her freight then pending.' It does not require that there be some fund, and it apparently contemplates that, even where the value of the owner's interest is zero dollars that shall be the measure of his liability.

 In The Abbie C. Stubbs, D.C., 28 F. 719, 720, the court declared:

'When a ship-owner sends his ship to sea, so far as his liability for collisions and other losses happening through the fault of those in charge of her, and without his privity or knowledge, is concerned, he puts at risk only his ship, the expense of navigating her, and the freight she may earn on the voyage. His responsibility is limited to the capital embarked in the adventure, and the profit he may gain from it in the form of freight, or its equivalent. If the ship is sunk or destroyed, and no freight earned, his whole responsibility is at an end.' Cf. The City of Norwich, 118 U.S. 468, 6 S. Ct. 1150, 30 L. Ed. 134.

 Benedict on Admiralty states in Volume 3, at p. 342:

'While it has been said that there must always be a fund in court, or a ship in the hands of a trustee, there have been cases where a vessel on a ballast voyage, without any freight, has disappeared at sea, and the courts have taken jurisdiction of the shipowner's petition and rendered a decree thereon. In such cases, there is no fund in court; yet there is the issue whether the damage-claimants can show that the shipowner is not entitled to any limitation at all.'

 Claimants cite no cases, nor have I found any, where the court refused jurisdiction of a limitation proceeding because there was no fund to be distributed. In at least two instances I have found the courts have proceeded in the matter where there was no fund. The Miramar, D.C., 31 F.2d 767; The Hewitt, D.C., 284 F. 911, 1923 A.M.C. 89.

 In Black Diamond S. S. Corp. v. Robert Stewart & Sons, 336 U.S. 386, at page 393, 69 S. Ct. 622, at page 626, 93 L. Ed. 754, the court cited with approval the case of Providence & New York S. S. Co. v. Hill Mfg. Co., 109 U.S. 578, at page 594, 3 S. Ct. 379, 27 L. Ed. 1038, wherein it stated:

"Unless some proceeding of this kind were adopted which should bring all the parties interested into one litigation, and all the claimants into concourse for a pro rata distribution of the common fund, it is manifest that in most cases the benefits of the act could never be realized. Cases might occur, it is true, in which the shipowners could avail themselves of those benefits, by way of defence alone, as where both ship and freight are totally lost, so that the owners are relieved from all liability whatever. But even in that case, in the absence of a remedy by which they could obtain a decree of exemption as to all claimants, they would be liable to a diversity of suits, brought, perhaps, in different states, after long periods of time, when the witnesses have been dispersed, and issuing in contrary results before different tribunals; * * *."

 The court there recognized the desirability of maintaining the limitation proceeding and the claims arising therein in the admiralty court, even in the absence of a fund. The Limited Liability Act 'was designed to induce the heavy financial commitments the shipping industry requires by mitigating the threat of a multitude of suits and the hazards of vast, unlimited liability as a result of maritime disaster.' Maryland Casualty Co. v. Cushing, 347 U.S. 409, 414, 74 S. Ct. 608, 611. ...

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