A libel in admiralty alleged that petitioners paid moneys to
respondent for transportation to Europe on respondent's vessel, and
that respondent breached the contract by abandonment of the voyage.
The libel further alleged that respondent wrongfully appropriated
the passage money to his own use and committed other fraudulent
acts.
Held: the cause of action alleged was within the
admiralty jurisdiction of the Federal District Court. Pp.
532-536.
(a) The essential character of the libel as a claim for breach
of a maritime contract was not altered by the allegations of
wrongfulness and fraud. Pp.
350 U. S.
534-535.
(b) So long as the claim asserted arises out of a maritime
contract, the admiralty court has jurisdiction over it. P.
350 U. S.
535.
(c) Admiralty has jurisdiction even where a libel reads like
indebitatus assumpsit at common law, provided that the
unjust enrichment arose out of the breach of a maritime contract.
Pp.
350 U. S.
535-536.
223 F.2d 406 reversed and remanded.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
The sole question in the case is whether the cause of action
alleged comes within the admiralty jurisdiction of the District
Court. The District Court held that this was an action on a
maritime contract, within the admiralty jurisdiction, 129 F. Supp.
410. The Court of Appeals reversed, holding that the suit was in
the nature of the
Page 350 U. S. 533
old common law
indebitatus assumpsit for money had and
received, based upon the wrongful withholding of money. 223 F.2d
406. The case is here on a petition for certiorari which we
granted, 350 U.S. 872, because of the seeming conflict of that
ruling with
Krauss Bros. Lumber Co. v. Dimon S.S. Corp.,
290 U. S. 117,
290 U. S. 124.
[
Footnote 1]
The libel alleges that respondent, doing business in his own and
in various trade names, owned and controlled a passenger vessel,
known as the
City of Athens, and held out that vessel as a
common carrier of passengers for hire, and that petitioners paid
moneys for passage upon the vessel, scheduled for July 15, 1947, to
Europe. A contract for the transportation of passengers is a
maritime contract within admiralty jurisdiction. [
Footnote 2]
The Moses
Taylor, 4 Wall. 411. The allegations so far
mentioned are plainly sufficient to establish such a contract. The
libel goes on to allege a breach of that contract through an
abandonment of the voyage. If this were all, it would be plain that
petitioners stated a claim for breach of a maritime contract. But
the libel further alleges that the sums paid by petitioners as
passage money were "wrongfully and deliberately" applied by
respondent to his own use and benefit "in reckless disregard of his
obligations to refund
Page 350 U. S. 534
the same" and that respondent "has secreted himself away and
manipulated his assets . . . for the purpose of defrauding"
petitioners. Then follow allegations of certain fraudulent acts and
transactions.
The allegations of wrongfulness and fraud do not alter the
essential character of the libel. For the ancient admiralty
teaching is that "[t]he rules of pleading in the admiralty are
exceedingly simple, and free from technical requirements."
Dupont de Nemours & Co. v.
Vance, 19 How. 162,
60 U. S.
171-172.
And see 2 Benedict, American Admiralty
(6th ed. 1940), §§ 223, 237. Though these particular
allegations of the libel sound in fraud or in the wrongful
withholding of moneys, it is plain in the context that the
obligation to pay the moneys arose because of a breach of the
contract to transport passengers. Lawyers speak of the obligation
in terms of
indebitatus assumpsit, a concept whose
tortuous development gave expression to "the ethical character of
the law."
See Ames, The History of Assumpsit, 2
Harv.L.Rev. 1, 53, 58 (1888). As Mr. Justice Holmes once put
it,
"An obligation to pay money generally is enforced by an action
of assumpsit, and to that extent is referred to a contract, even
though it be one existing only by fiction of law."
Thomas v. Matthiessen, 232 U.
S. 221,
232 U. S.
235.
The fiction sometimes distorted the law. A line of authorities
emerged to the effect that admiralty had no jurisdiction to grant
relief in such cases,
"because the implied promise to repay the moneys which cannot in
good conscience be retained -- necessary to support the action for
money had and received -- is not a maritime contract. [
Footnote 3]"
United Transportation & Lighterage Co. v. New York &
B.T. Line, 185 F. 386, 391. Yet that duty to pay is often
referable,
Page 350 U. S. 535
as here, to the breach of a maritime contract. As Mr. Justice
Stone said in
Krauss Bros. Lumber Co. v. Dimon S.S. Corp.,
supra, at
290 U. S.
124:
". . . Even under the common law form of action for money had
and received, there could be no recovery without proof of the
breach of the contract involved in demanding the payment, and the
basis of recovery there, as in admiralty, is the violation of some
term of the contract of affreightment, whether by failure to carry
or by exaction of freight which the contract did not
authorize."
The truth is that, in a case such as the present one, there is
neither an actual promise to repay the passage moneys nor a second
contract. The problem is to prevent unjust enrichment from a
maritime contract.
See Morrison, The Remedial Powers of
the Admiralty, 43 Yale L.J. 1, 27 (1933). A court that prevents a
maritime contract from being exploited in that way does not reach
beyond the domain of maritime affairs. We conclude that, so long as
the claim asserted arises out of a maritime contract, the admiralty
court has jurisdiction over it.
The philosophy of
indebitatus assumpsit is, indeed, not
wholly foreign to admiralty. Analogous conceptions of rights based
on
quasi-contract are found in admiralty. One who saves
property at sea has the right to an award of salvage, regardless of
any agreement between him and the owner.
See Mason v.
Ship Blaireau, 2 Cranch 240,
6 U. S. 266;
The Sabine, 101 U. S. 384,
101 U. S. 390;
1 Benedict,
supra, § 117
et seq. Likewise,
where cargo is jettisoned, the owner becomes entitled to a
contribution in general average from the owners of other cargo
which was saved without the aid of any agreement.
See Barnard v.
Adams, 10 How. 270,
51 U. S.
303-304;
Star of Hope,
9 Wall. 203,
76 U. S.
228-230; 1 Benedict,
supra, § 98. Other
examples could be given.
See Chandler, Quasi Contractual
Relief
Page 350 U. S. 536
in Admiralty, 27 Mich.L.Rev. 23 (1928). Rights which admiralty
recognizes as serving the ends of justice are often
indistinguishable from ordinary
quasi-contractual rights
created to prevent unjust enrichment. How far the concept of
quasi-contracts may be applied in admiralty it is
unnecessary to decide. It is sufficient this day to hold that
admiralty has jurisdiction, even where the libel reads like
indebitatus assumpsit at common law, provided that the
unjust enrichment arose as a result of the breach of a maritime
contract. Such is the case here.
The judgment is reversed, and the case is remanded to the Court
of Appeals for proceedings in conformity with this opinion.
Reversed and remanded.
[
Footnote 1]
There is also an apparent conflict with
Sword Line, Inc. v.
United States, 228 F.2d 344, 346, decided, after we granted
certiorari, by a different panel of the Second Circuit from the one
which sat in the instant case.
[
Footnote 2]
The Court in
New Jersey Steam Navigation
Company v. Merchants' Bank, 6 How. 344,
47 U. S. 392,
stated that, in determining admiralty jurisdiction, the inquiry
is
"into the nature and subject matter of the contract -- whether
it was a maritime contract, and the service a maritime service, to
be performed upon the sea, or upon waters within the ebb and flow
of the tide. And, again, whether the service was to be
substantially performed upon the sea or tidewaters although it had
commenced and had terminated beyond the reach of the tide; if it
was, then jurisdiction has always been maintained."
[
Footnote 3]
And see Israel v. Moore & McCormack Co., 295 F.
919;
Home Ins. Co. of New York v. Merchants' Transp. Co.,
16 F.2d 372;
Silva v. Bankers Commercial Corp., 163 F.2d
602.