Cullen Fuel Co., Inc. v. W. E. Hedger, Inc., 290 U.S. 82 (1933)

U.S. Supreme Court

Cullen Fuel Co., Inc. v. W. E. Hedger, Inc., 290 U.S. 82 (1933) Cullen Fuel Co., Inc. v. W. E. Hedger, Inc.

No. 9

Argued October 11, 1933

Decided November 6, 1933

290 U.S. 82

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

1. Rulings of the court below that, under the circumstances of this case, a contract of charter, orally arranged by an employee of a corporate owner, was the personal contract of the owner, and that a bailee of cargo was entitled to recover for its loss due to a breach of the warranty of seaworthiness, sustained. P. 290 U. S. 88.

Page 290 U. S. 82

2. A boat owner who has chartered his boat by his personal contract of charter cannot, under U.S.C. Title 46, §§ 183, 188, 189, limit his liability for breach of his warranty of seaworthiness, even though such warranty is not expressed in the contract, but is merely implied. P. 290 U. S. 88.

3. The warranty of seaworthiness is implied from the circumstance of the parties and the subject matter of the contract, and is as much a part of the contract as any express stipulation. It may be negatived only by express covenant. P. 290 U. S. 88.

4. Inasmuch as the warranty of seaworthiness relates only to the fitness of the vessel at the commencement of the voyage, and not to her suitability under conditions thereafter arising which are beyond the owner's control, the denial of limitation of liability in case where the owner by his personal contract warrants seaworthiness does not cut away the protection afforded to ship owners by the Act of Congress. P. 290 U. S. 88.

62 F.2d 68 affirmed.

Certiorari, 289 U.S. 717, to review a judgment affirming a decree of the district court, 45 F.2d 859, denying limitation of liability in admiralty.

Page 290 U. S. 87

MR. JUSTICE ROBERTS delivered the opinion of the Court.

The petitioner owned a deck scow known as Cullen No. 32. The respondent wished to use her to lighter ore from ship-side in New York Harbor to the plant of the Grasselli Chemical Company, the consignee of the ore. A charter for an indefinite term at a fixed daily rate of hire was orally arranged by telephone with the petitioner's marine superintendent. The day following the demise, while being loaded from the ship, the scow capsized, dumped her cargo, and damaged an adjacent wharf and vessel. Suits ensued, one of them by the respondent as bailee of the cargo, against the petitioner as owner of the scow. Limitation of liability was sought by the petitioner, but the district court refused a decree for limitation, [Footnote 1] finding that the scow was unseaworthy at the time of the demise.

The Circuit Court of Appeals concurred in this finding and based its affirmance [Footnote 2] of the trial court's decision upon the ground that, as the charter was the personal contract of the owner and included an implied warranty of seaworthiness, the petitioner was precluded from the benefit of the limitation statutes. [Footnote 3]

The petitioner, conceding that, where the owner personally expressly warrants seaworthiness, he is not entitled to the benefit of the limited liability statutes (Pendleton v. Benner Line, 246 U. S. 353, Luckenbach v. McCahan Sugar Refining Co., 248 U. S. 139), correctly states that, despite the decision of this Court in Capitol Transportation Co. v. Cambria Steel Co., 249 U. S. 334, the contrariety of opinion which existed in the various circuits prior to

Page 290 U. S. 88

that case, as to the effect of the implied warranty of the owner, [Footnote 4] still persists. [Footnote 5] We therefore granted certiorari. [Footnote 6]

We pass, without discussion, the contentions that the court below erred in its rulings that the owner's contract was personal, and that the respondent, as bailee of the cargo, was entitled to recover from the charterer, as we are of opinion that both points were correctly decided (The Benjamin Noble, 232 F. 382; 244 F. 95; Capitol Transportation Co. v. Cambria Steel Co., supra; Pendleton v. Benner Line, supra, 246 U. S. 355-356), and come to the question of petitioner's right of limitation notwithstanding the implied warranty of seaworthiness. The Capitol Transportation case is an authority against the right. As appears by the opinion of the District Court (The Benjamin Noble, 232 F. 382), the contract of the owner in that case was oral and no express warranty was given.

We see no reason to restrict or modify the rule there announced. The warranty of seaworthiness is implied from the circumstances of the parties and the subject matter of the contract and may be negatived only by express covenant. [Footnote 7] It is as much a part of the contract as any express stipulation. Delaware & Hudson Canal Co. v. Penna. Coal Co., 8 Wall. 276, 75 U. S. 288; Grossman v. Schenker, 206 N.Y. 466, 469, 100 N.E. 39; United States v. A. Bentley & Sons Co., 293 F. 229.

The petitioner urges that the denial of limitation in cases like this will sweep away much of the protection

Page 290 U. S. 89

afforded to ship owners by the acts of Congress. But this view disregards the nature of the warranty. The fitness of the ship at the moment of breaking ground is the matter warranted, and not her suitability under conditions thereafter arising which are beyond the owner's control. Compare Armour & Co. v. Fort Morgan S.S. Co., 270 U. S. 253; The Ice King, 261 F. 897; The Soerstad, 257 F. 130.

The judgment is

Affirmed.

[Footnote 1]

45 F.2d 859.

[Footnote 2]

62 F.2d 68.

[Footnote 3]

R.S. §§ 4283, 4289; Act of June 26, 1884, c. 121, § 18, 23 Stat. 57, U.S.Code, Tit. 46, §§ 183, 188, 189.

[Footnote 4]

Quinlan v. Pew, 56 F. 111; The Republic, 61 F. 109; The Tommy, 151 F. 570; Great Lakes Towing Co. v. Mill Transp. Co., 155 F. 11; The Loyal, 204 F. 930.

[Footnote 5]

The Ice King, 261 F. 897; Pocomoke Guano Co. v. Eastern Transp. Co., 285 F. 7; The City of Camden, 292 F. 93; Tucker Stevedoring Co. v. Southwark Mfg. Co., 24 F.2d 410.

[Footnote 6]

289 U.S. 717.

[Footnote 7]

Lawrence v. Minturn, 17 How. 100, 58 U. S. 110; Work v. Leathers, 97 U. S. 379; The Caledonia, 157 U. S. 124, 157 U. S. 130; The Carib Prince, 170 U. S. 655; The Irrawaddy, 171 U. S. 187, 171 U. S. 190; The Southwark, 191 U. S. 1.