Craig v. Continental Ins. Co.

26 F. 798, 1886 U.S. App. LEXIS 2006

• Court: U.S. Circuit Court for the District of Eastern Michigan
• Decided: February 8, 1886
• Status: Published

Opinion

BRown, J.

The most important question in this case, and one which goes to the entire merits of the plaintiff’s claim, arises upon the request of the defendant to charge that the limited liability act is a complete bar to the action. This act, winch, so far as it is applicable to this case, is embodied in Bev. St. § 4283, declares that “the liability of the owner of any vessel, for any * * *' act, matter, or thing, loss, damage, or forfeiture, done, occasioned, or incurred without the privity or knowledge of such owner or owners, shall in no case exceed the amount or value of the interest of such owner in such vessel, and her freight then pending.” It is conceded in this case that the Enterprise became the property of the defendant by virtue of the abandonment, and that she became a total loss at the time of the death of Carbry. If the act applies to this case, it follows that the liability of the defendant was extinguished by the sinking of the vessel. There is no doubt that when the loss is total this fact may be pleaded, and no proceedings under the statute are necessary. The Scotland, 105 U. S. 24.

It was suggested upon the argument that the statute did not apply to a vessel in the condition of the Enterprise; but this objection is without force. She was still a vessel, though seriously injured by the stranding, and was in a condition to do damage to other property. It certainly cannot bo the law that the owner loses the protection of the act the moment his vessel goes ashore, and that ho must abandon her then at the peril of waiving this defense.

It is further insisted, however, that the act does not apply, as the negligence was not without the privity or knowledge of the owner. This position assumes that the knowledge and privity of Eardon was that of the insurance company; in other words, that he stood in the position of owner to this vessel. Upon the trial of this case I felt very grave doubt as to the soundness of this proposition, but decided to give plaintiff the benefit of this doubt, that the question might be more carefully considered upon motion for a new trial. - None of the reported cases are decisive. Few of them throw any light upon the point. It was held in Walker v. Transportation Co., 3 Wal. 150, that the owners of the vessel were entitled to the benefit of the act, notwithstanding the negligence of their officers andnrew; in other words, that the negligence of the owner must be a personal negligence; but the question who is the person whose negligence shall deprive a corporation owner - of the benefit of the act was not considered. This ruling was followed in The Whistler, 2 Sawy. 348, and in Chisholm v. Northern Transp. Co., 61 Barb. 363. Such is also the ruling of tbe English courts. Wilson v. Dickson, 2 Barn. & Ald. 2-13; The Warkworth, 9 Prob. Div. 20. In Lord, v. Goodall, 4 Sawy. 292, it was said that when the owner is a corporation, the privity or knowledge of the managing officers of the corporation must be regarded as the privity and knowledge of the corporation itself; citing Philadelphia, etc., R. Co. v. Quigley, 21 How. 202, and Hill Manuf’g Co. v. Providence, etc., S. S. Co., 113 Mass. 495, wherein it was said, in reference to this act, that “if the owners are a corporation, the president and directors are not merely the. agents or servants, but the representatives, of the corporation, and the acts, intentions, and negligence of such officers are those of the corporation itself.”

These appear to be the only cases in which the point is alluded to. If the question were whether Pardon was a fellow-servant of Garbry, in such sense as to make the corporation responsible to the plaintiff for his negligence, we should have no hesitation in saying, upon the authority of Hough v. Railway Co., 100 U. S. 213, and Chicago, etc., R. Co. v. Ross, 112 U. S. 377, S. C. 5 Sup. Ct. Rep. 184, that he was not. But in this class of cases the Question is not one of exemption, but of limitation of liability. The act does not contemplate that the owner shall be exempt from liability by reason of the negligence of bis servants, but that his liability shall be limited to his interest in the vessel, unless his personal negligence shall have contributed to the loss. Pardon was not an officer of the corporation. He was not its general agent. He was the marine inspector or wrecking agent of four companies, of which the defendant was one. He was not even employed directly by the corporations, but by Crosby & Dimock, their general agents at Buffalo; and, so far as the record shows, neither the president nor the directors of these corporations had any knowledge of his appointment. His powers were no greater than those of the master of a vessel, whose authority to employ assistance when his ship is stranded is beyond dispute. If the owner had been an individual instead of a corporation, it would have seemed clearer that Pardon did not stand in his place, but the law applicable to the case would be the same. We are entirely clear, in our opinion, that the case is within the act, and that the judgment should be for the defendant.

The verdict will be set aside, and a new trial granted.