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In re Petition of Paul F. Wood for Exoneration From or Limitation of Liability

UNITED STATES COURT OF APPEALS SECOND CIRCUIT


decided: February 16, 1956.

IN RE PETITION OF PAUL F. WOOD FOR EXONERATION FROM OR LIMITATION OF LIABILITY

Author: Hincks

Before FRANK, HINCKS and LUMBARD, Circuit Judges.

HINCKS, Circuit Judge.

This is an appeal from an order of the United States District Court for the Southern District of New York denying appellants' motions to dismiss a petition for limitation of liability under 46 U.S.C.A. § 184 and to permit appellants to pursue their common law remedies 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. The opinion below is reported at 124 F.Supp. 540.

Petitioner's F. V. Susan with a master and crew of six departed from Wildwood, New Jersey on December 4 or 5, 1953, to engage in commercial fishing and has never been heard from since. On February 9, 1954, before any law suits were begun, the petitioner filed a petition seeking exoneration from or limitation of liability alleging that the Susan was seaworthy in all respects; that she perished 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; and that the vessel is believed to be a total loss and there is no pending freight or any limitation fund. On February 10, 1954 an order was entered directing the issuance of a monition, requiring the filing of all claims on or before March 16, 1954, and staying the prosecution of all suits except in the limitation proceeding. The appellants, as next of kin and distributees of the deceased seamen, filed the aforesaid motions in which they alleged, inter alia, that the vessel when it left port was unseaworthy to the owner's knowledge. The motions were heard together and denied with leave for an extension of time for filing claims until 30 days from a final determination of this appeal.

The appellants urge in support of their motions that seamen's claims based on unseaworthiness are not subject to limitation despite lack of knowledge or privity because such claims are contractual in nature and "personal" to the owner. They rely on a line of cases which hold that as between parties to a charter-party the express or implied warranty of seaworthiness is personal to the owner and not subject to the Limitation Act.*fn1 These cases are based on a theory of a warranty implied in fact and recognize the right of the charterer to expressly disclaim such a warranty.*fn2 But the owner's liability to a seaman for failure to supply a seaworthy vessel flows from an obligation imposed by law which is absolute, non-delegable, and not subject to disclaimer.*fn3 In the former class of cases the obligation, since based on contract and not on law, is "personal" to the owner and therefore not subject to limitation. But the owner's liability to seamen for unseaworthiness, like the liability for negligence,*fn4 is imposed by law as an essential element of the relationship between owner and seaman,*fn5 is neither voluntary nor "personal," and is, therefore, subject to the Limitation Act.*fn6

Since we hold that the Limitation Statute is applicable to seamen's claims based on unseaworthiness, the issue of the owner's privity or knowledge must be litigated in the admiralty court, which has exclusive jurisdiction over that issue.*fn7 As this proceeding is a nofund case, the owner will be entitled to exoneration from liability for seamen's claims and a permanent injunction against suits thereon in other forums if it shall be found entitled to limitation in the admiralty court.*fn8 In the interim, the owner is entitled to a restraining order against prosecution of any other suits on claims subject to limitation.*fn9 If, however, the owner shall be found not to be entitled to a limitation, his liability will be unlimited and there will be no need for a concourse to marshal the various claims. In that event the claims will no longer be "subject to limitation" within the meaning of Admiralty Rule 51 and, therefore, any order denying the owner's right to limitation should contain provisions for lifting the restraining order. At that time the claimants may elect to pursue their claims to judgment in the admiralty court*fn10 or pursue their rights under the Jones Act.*fn11

However, in order to protect claimants from the running of the statute of limitations under the Jones Act*fn12 pending the determination of the issues in the limitation proceedings, the district court should on motion modify the restraining order to permit claimants to institute actions at law but pending determination of the owner's right to exoneration enjoin further prosecution of actions thus instituted and claim of default therein for failure of the owner to plead.

Affirmed with leave to move for a modification of the order below.


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