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Siegelman v. Cunard White Star Limited

decided: February 17, 1955.


Author: Harlan

Before CLARK, Chief Judge, and FRANK and HARLAN, Circuit Judges.

HARLAN, Circuit Judge.

Plaintiff, in his own right and as administrator of his wife's estate, brings this action to recover for injuries suffered by his wife on the defendant's vessel, the R.M.S. Queen Elizabeth. The action was begun in a New York state court on December 14, 1951, and removed on diversity grounds to the federal district court for the Southern District of New York on January 3, 1952, the requisite jurisdictional amount being present.

On September 9, 1949, the Compass Travel Bureau, Inc., Cunard's New York agent, issued to Mr. and Mrs. Elias Siegelman a document describing itself as a "Contract Ticket." It was a large sheet of light green paper, about 13 inches long and 11 inches wide. On the back were certain notices to passengers, relating to baggage, time of collection of ticket, location of the company's piers and offices, etc. On the front was printed in black Cunard's promise to provide specified transportation, in this case from New York to Cherbourg, subject to certain exceptions, and to 22 "terms and conditions," also printed in black. Printed in red in heavier type was a notice directing the attention of passengers to these "terms and conditions." Also printed in red, and in capital letters, was a statement that "it is mutually agreed that this contract ticket is issued by the Company and accepted by the passenger on the following terms and conditions." The paper also contained a space where the departure time, the names of the passengers and of the ship, and other data were typed in. The paper was stated to be non-transferable. In a space provided for the signature of the company, the name of the Compass Travel Bureau was typed. The paper was not signed by either of the passengers.

On September 24, 1949, when the Queen Elizabeth had been at sea four days, Mrs. Siegelman was injured. While she was seated in a dining room chair, she and the chair were overthrown. Her chair was alleged to be the only one in the dining room which was not bolted to the floor. Upon returning to New York, the Siegelmans retained an attorney to prosecute their claim against Cunard. On August 31, 1950, after Cunard's doctor had examined Mrs. Siegelman, Cunard offered $800, the approximate amount of medical expenses stated to have been incurred by the plaintiff and his wife, in settlement of the claim. This offer was made to the Siegelmans' lawyer over the telephone by Swaine, a claim agent of Cunard. Noticing that the ticket required suits for bodily injury to be brought within a year of the injury, and that the injury had occurred barely less than a year ago, the lawyer asked Swaine whether it would be necessary to begin suit in order to protect his clients' rights. Swaine is said to have stated that no suit was necessary, that the filing of an action would be futile in view of the prospect of early settlement, and that Cunard's offer would stand open.

Subsequently Mrs. Siegelman died. Then, on January 4, 1951, Cunard withdrew its offer, which had not yet been accepted, stating that it could not be tendered to any one other than the injured party.

On December 14, 1951, this suit was begun, claiming on behalf of the deceased damages for pain and medical expenses, and on behalf of her husband, damages for other medical expenses and for loss of consort. Cunard denied legal responsibility for the accident, and set up as a further defense the plaintiff's failure to bring the action within a year of the date the injury was suffered.

In January, 1953, the defendant moved to dismiss the action on the latter ground. Treating the motion as one for summary judgment, and having received affidavits from the attorneys and from the plaintiff, the court found the issues for the defendant, and dismissed the complaint.

On this appeal appellant asserts that Cunard is barred from using the period of limitation as a defense, because of Swaine's statement that suit was unnecessary. The provisions of the "Contract Ticket" relevant to the appeal are as follows:

"10. * * * No suit, action or proceeding against the Company or the ship, or the Agents of either, shall be maintainable for loss of life of or bodily injury to any passenger unless * * * (b) * * * the suit, action or proceeding is commenced within one year from the day when the death or injury occurred.

"11.The price of passage hereunder has been fixed partly with reference to the liability assumed by the Company as defined by this contract, and no agreement, alteration or amendment creating any other or different liability shall be valid unless made in writing and signed for the Company by its Chief Agent at the port of embarkation.

"20. All questions arising on this contract ticket shall be decided according to English Law with reference to which this contract is made."

Before reaching the merits of the plaintiff's claim, we must deal with a number of preliminary questions: (1) Are federal or state choice-of-law rules to be applied here? (2) What is the applicable choice-of-law rule of the proper authority?(3) If the applicable choice-of-law rule points to the use of English law, what difference is made by the facts that English law was not pleaded or proved below, and that the plaintiff made no attempt to supply affidavits of experts on English law, after the trial Judge had offered him an opportunity to do so?


This case involves a claim based on a tort, committed on the high seas, and a defense based on a contract made in New York, to be performed there, on the high seas, and abroad. Our first question, though, is not what law governs the issues involved, but rather what law, federal or New York, controls the choice of the governing law. This is not a question of choice of laws, properly speaking, but rather a question of the division of competence between federal and state authority.

The Constitution, Article III, Section 2, extended the federal judicial power "to all Cases of admiralty and maritime Jurisdiction." In implementing this provision in the Judiciary Act of 1789, Congress provided that litigants might also take advantage of their common-law remedies, and this provision was interpreted to permit suits on maritime causes in state as well as federal courts. See discussion in Chelentis v. Luckenbach S.S. Co., 1918, 247 U.S. 372, 38 S. Ct. 501, 62 L. Ed. 1171. From an early time, therefore, maritime litigation has been carried on in both systems of courts. And the law applied has been both state and federal; for example, state wrongful death acts have been applied in federal courts. See Levinson v. Deupree, 1953, 345 U.S. 648, 73 S. Ct. 914, 97 L. Ed. 1319, and the Jones Act, 46 U.S.C.A. § 688, extending the benefits of the Federal Employers' Liability Act to maritime workers, has been applied in state courts, see Garrett v. Moore-McCormack Co., Inc., 1942, 317 U.S. 239, 63 S. Ct. 246, 87 L. Ed. 239. Under these circumstances it is not always easy to ascertain whether federal or state law governs particular issues.

In cases where federal jurisdiction is based solely on diversity of citizenship, the doctrine of Erie R.R. v. Tompkins, 1938, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, requires the application by the federal court of substantially the same law as would be applied by the courts of the state in which the federal court is held. If this case were governed by Erie, we would be required to apply New York's choice-of-law rules. Klaxon Co. v. Stentor Electric Mfg. Co., 1941, 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477. But suits brought in admiralty are not governed by Erie. Levinson v. Deupree, supra. And even though this case was not begun in the federal admiralty court, Erie does not require the federal court to handle the case in substantially the same fashion as a state court would. Jansson v. Swedish-American Line, 1 Cir., 1950, 185 F.2d 212, 30 A.L.R.2d 1385. That is not to say, however, that state and federal courts may always apply different substantive law in maritime cases. On the contrary, where the cause of action is created by a state statute the federal court must presumably follow the state court's interpretation of it with regard to substantive matters, see Levinson v. Deupree, supra, assuming, of course, that the state-created right may be received into admiralty under the doctrine set out in Southern Pacific Co. v. Jensen, 1917, 244 U.S. 205, 37 S. Ct. 524, 61 L. Ed. 1086, and its successors. The same substantive law must also be applied by federal and state courts in cases governed by federal statutes, see Garrett v. Moore-McCormack Co., Inc., supra. It has also been said that the same substantive law applies to common law actions whether brought in federal or state courts, Jansson v. Swedish-American Line, supra; and a long list of authorities is cited for this proposition, although Mr. Justice Frankfurter, in Caldarola v. Eckert, 1947, 332 U.S. 155, 67 S. Ct. 1569, 91 L. Ed. 1968, may have left that issue in doubt. Cf., however, the majority and concurring opinions in Pope and Talbot, Inc. v. Hawn, 1953, 346 U.S. 406, 74 S. Ct. 202, 98 L. Ed. 143.

Under the circumstances, we consider that we are not bound to apply New York's choice-of-law rules. Erie and Klaxon do not compel us to. And this is not a case, like Levinson v. Deupree, supra, where the federal court is considering a claim based on a state-created right. Even if it were, it is possible that the federal court would not be bound by the state's choice-of-law rule, unless the rule limited the scope of the right. Instead, the claim here is for a tort committed on the high seas, and the federal choice-of-law rule might well be binding on the state courts, if either rule is to be binding in both sets of courts.

In Jansson v. Swedish American Line, supra, a suit brought originally on the civil side of the federal court but also involving a maritime tort, the court applied the federal choice-of-law rule. It is true that in that case there was no defense, as there is here, based on a contract made in one of the United States, but we do not think that should change the result. That might be a ground for judging the claim and the defense by different laws. But as far as choice-of-law rules are concerned, either the forum's rule should be applied automatically, or as Jansson suggests, the nature of the claim should govern which rule controls. Under both of these approaches, the federal choice-of-law rule applies here.


Our next question is: under the federal choice-of-law rule, what law governs the issues here? We are not concerned with the law applicable to the accident. Instead we must decide what law applies to the validity and interpretation of certain provisions of the "Contract Ticket," and to the effect of Swaine's conduct upon Cunard's right to resort to the one-year limitation period in the contract.

The ticket stipulated that "All questions arising on this contract ticket shall be decided according to English Law with reference to which this contract is made." Considering, as we do, the ticket to be a contract - see Foster v. Cunard White Star, 2 Cir., 1941, 121 F.2d 12 - the provision that English law should govern must be taken to represent the intention of both parties. Therefore, this provision, if effective under the federal choice-of-law rule, renders English law applicable here, even though, absent the provision, some other law would govern under the applicable federal conflicts rule. See Liverpool & Great Western Steam Co. v. Phenix Ins. Co., 1889, 129 U.S. 397, 9 S. Ct. 469, 478, 32 L. Ed. 788, in which the Supreme Court said: "* * * the general rule that the nature, the obligation, and the interpretation of a contract are to be governed by the law of the place where it is made, unless the parties at the time of making it have some other law in view, requires a contract of affreightment, made in one country between citizens or residents thereof, and the performance of which begins there, to be governed by the law of that country * * *".

Liverpool also indicates that there may be an exception to this rule where a contract stipulates another law, but the scope of this exception is not clear. Thus, since we cannot assume that the parties' choice of law will always foreclose the court from applying another law, our question is whether the contract provision here should have the effect, under federal conflicts rules, of making the English law applicable to the particular questions posed by this case. While this question may appear on the surface to be purely one of conflict of laws, we think it also involves interpretation of the contract. For it is not altogether free from doubt what is meant by the stipulation that "All questions arising on this contract ticket shall be decided according to English Law * * *." See 40 Col.L.Rev. 518, 522-23 (1940), criticizing one interpretation of a similar provision.

Our issue, then, involves two lines of inquiry: (1) What questions did the parties intend to be controlled by English law? and (2) Will the federal conflicts rule give effect to their intention? In pursuing the first inquiry, we must examine more closely the provision of the ticket quoted above.

Three questions as to the scope of this provision arise under its language. First, are questions to be decided by the "whole" English law, including its conflicts rules, or just by the substantive English law? That is, are questions to be decided according to the law of England, or instead, as an English court might decide them, applying where appropriate the law of some other country? We think the provision must be read as referring to the substantive law alone, for surely the major purpose of including the provision in the ticket was to assure Cunard of a uniform result in any litigation no matter where the ticket was issued or where the litigation arose, and this result might not obtain if the "whole" law of England were referred to. Second, does the provision intend that questions of validity of the contract and its provisions, as well as questions of interpretation, are to be governed by English law? The language of the clause, covering "all questions," indicates that validity as well as interpretation is embraced. Third, is the recital meant to require the application of English law to the question of what conduct may amount to a waiver of its provisions? Although the wording of the clause - relating to questions arising "on" the contract - may indicate that such a question was not meant to be covered, it appears unnatural to hold that all questions of validity and interpretation were intended to be governed by English law but that this question was not. We therefore consider that the question of what conduct was sufficient to operate as a waiver of the ticket's provisions was also meant to be determined by English law.

We now come to the inquiry as to the extent to which this provision, so construed, is to be given effect in deciding the particular issues before us. Those issues are: (1) Is the one-year limitation period provided in the contract for the bringing of suits valid? (2) Does Swaine's conduct prevent Cunard from using the period as a defense? and (3) How is this matter affected by the clause requiring alterations of the contract to be in writing? It appears not to be contested that the ticket should be treated as a contract and that failure to bring the action within the contract limitation period would be a defense under English law - see Jones v. Oceanic Steam Navigation Co., [1924] 2 K.B. 730, but since the same result would follow under American law - see 46 U.S.C.A. § 183(b); Scheibel v. Agwilines, Inc., 2 Cir., 1946, 156 F.2d 636 - we need not decide whether English law is applicable to the first of these issues. As to the second and third issues - where English and American law may differ - in the view which we take of the case, we need really only deal with applicability of English law ...

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