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Statement of the Case.
225 U. S.
ON CERTIFICATE FROM THE UNITED STATES CIRCUIT COURT
OF APPEALS FOR THE SECOND CIRCUIT.
No. 220. Argued April 18, 1912.-Decided May 13, 1912.
A general average agreement inserted in bills of lading, providing that
if the owner of the ship shall have exercised due diligence to make the ship in all respects seaworthy and properly manned, equipped and supplied, the cargo shall contribute in general average with the shipowner even if the loss resulted from negligence in the navigation of the ship, is valid under the Harter Act, and entitles the shipowner to collect a general average contribution from the cargoowners in respect to sacrifices made and extraordinary expenditures incurred by him for the common benefit and safety of ship, cargo
and freight subsequent to a negligent stranding. Under $3 of the Harter Act, the cargo-owners under the same cir
cumstances have a right of contribution from the shipowner for sacrifices of cargo made subsequent to the stranding for the com
mon benefit and safety of ship, cargo and freight. Under the same circumstances the cargo-owners cannot recover con
tribution from the shipowner in respect of general average sacrifices of cargo, without contributing to the general average sacrifices and
expenditures of the shipowners made for the same purpose. The essence of general average contribution is that extraordinary
sacrifices made and expenses incurred for the common benefit are
to be borne proportionately by all who are interested. The Irrawaddy, 171 U. S. 187, distinguished. Questions certified in case reported in 162 Fed. Rep. 56, and 178 Fed.
Rep. 414, answered.
Cross libels were filed in the United States District Court for the Southern District of New York between the owner of the steamship Jason and the firm of Arbuckle Brothers, owners, and the Insurance Company of North
1 The docket title of the case is Actieselskabet “Jason" v. John Arbuckle et al.
America, insurers, of part of that vessel's cargo, to recover general average contributions. The District Court dismissed both libels. 162 Fed. Rep. 56. Upon appeal the Circuit Court of Appeals at first filed an opinion for affirmance (178 Fed. Rep. 414), but afterwards granted a rehearing, as a result of which the questions of law at issue were certified to this court as follows:
“Statement of Facts. “The facts upon which the questions arise are these:
“On July 30, 1904, the Norwegian Steamship Jason while bound on a voyage from Cienfuegos, Cuba, to New York, with general cargo, including 12,000 bags of sugar, consigned to Arbuckle Brothers, and insured with the Insurance Company of North America, stranded off the south coast of Cuba, through the negligence of her navigators. The steamship was seaworthy and was properly manned, equipped and supplied.
"The vessel was relieved from the strand on August 9 as the result of sacrifices by jettison of 2,042 bags of sugar (1,657 bags being the property of Arbuckle Brothers), of sacrifices and extraordinary expenditures voluntarily made or incurred by the shipowner through the master, and of the services of salvors specially employed. Said sacrifices and expenditures were necessary to relieve ship, cargo and freight from common peril. She then completed her voyage, and made delivery of the remainder of her cargo to the several consignees at New York on their executing an average bond for the payment of losses and expenses which should appear to be due from them, provided they were stated and apportioned by the adjusters 'in accordance with established usages and laws in similar cases.'
“The bills of lading for all of the Jason's cargo contained the following provision: "General average payable according to York-Antwerp
Rules, and as to matters not therein provided for according to usages of port of New York.
“ 'If the owner of the ship shall have exercised due diligence to make said ship in all respects seaworthy and properly manned, equipped and supplied, it is hereby agreed that in case of danger, damage or disaster resulting from fault or negligence of the pilot, master or crew, in the navigation or management of the ship, or from latent or other defects, or unseaworthiness of the ship, whether existing at time of shipment or at beginning of the voyage, but not discoverable by due diligence, the consignees or owners of the cargo shall not be exempted from liability for contribution in General Average, or for any special charges incurred, but with the shipowner shall contribute in General Average, and shall pay such special charges, as if such danger, damage or disaster had not ,resulted from such fault, negligence, latent or other defect or unseaworthiness.'
“Both parties pleaded the bills of lading as constituting the contract of carriage.
“A general average adjustment was afterwards made in New York by Johnson & Higgins, adjusters appointed in the average bond. Both parties presented their claims to the adjusters for sacrifices made by them respectively for the common benefit and safety of the adventure. The adjusters allowed in the General Average account the compensation of the salvors, the sacrifices of cargo, and the sacrifices and extraordinary expenditures of the shipowner, and each of the interests was credited with such amounts as had been paid by it for the common benefit.
"The adjustment was prepared in accordance with York-Antwerp Rules, as provided for in the bill of lading, and otherwise in accordance with established usages and laws.
“The adjustment and apportionment of General Average, so made, showed a balance due from Arbuckle
Brothers of $5,060.24, which the latter refused to pay. The grounds of such refusal were that the stranding resulted from the ship's negligence, and that the general average clause, above quoted, contained in the bills of lading is invalid.
“The original libel was filed by the owner of the Jason against Arbuckle Brothers and its guarantor, the Insurance Company of North America, to recover this amount.
“Arbuckle Brothers and the Insurance Company of North America filed a cross libel to recover the sum of $3,506.50, which they alleged would be due them on an adjustment of the general average losses, if the shipowner's losses and sacrifices were excluded from the General Average account by reason of the fact that the stranding was caused by negligence of the ship's navigators. They claimed that the shipowner's sacrifices and extraordinary expenditures, made for the common benefit and safety of the adventure after the stranding, should not be allowed in the adjustment. If said sacrifices and expenditures should be excluded from the adjustment and the value of the ship should be taken account of as a contributory interest, the adjustment would show a balance in favor of Arbuckle Brothers.
"The District Court made a decree dismissing both libels, from which decree both parties duly appealed to this Court.
Questions Certified. “Upon the facts above set forth the questions of law concerning which this Court desires the instruction of the Supreme Court are:
"1. Whether the general average agreement above quoted from the bills of lading is valid, and entitles the shipowner to collect a general average contribution from the cargo owners, under the circumstances above stated, in respect of sacrifices made and extraordinary expendi
tures incurred by it subsequent to the stranding for the common benefit and safety of ship, cargo and freight.
“2. Whether, in view of the provisions of the third section of the Harter Act the cargo owners, under the circumstances above stated, have a right to contribution from the shipowner for sacrifices of cargo made subsequent to the stranding, for the common benefit and safety of ship, cargo and freight?
“3. Whether the cargo owners, under the circumstances above stated, can recover contribution from the shipowner in respect of general average sacrifices of cargo, without contributing to the general average sacrifices and expenditures of the shipowner made for the same purpose.
"In accordance with the provisions of Section 6 of the Act of March 31, 1891, establishing courts of appeals, the foregoing questions of law are by the Circuit Court of Appeals of the United States for the Second Circuit, hereby certified to the Supreme Court.”
Mr. J. Parker Kirlin, with whom Mr. Charles C. Burlingham was on the brief, for The Jason:
The facts present a case of general average within the meaning of the clause in the bill of lading.
All loss which arises in consequence of extraordinary sacrifices made, or expenses incurred for the preservation of the ship and cargo, comes within general average, and must be borne proportionably by all who are interested. Birkley v. Presgrave, 1 East, 220; Columbian Ins. Co. v. Ashby, 13 Pet. 331; McAndrews v. Thatcher, 3 Wall. 348; The Star of Hope, 9 Wall. 203; Lowndes, 5th ed., p. 25.
The case was one of general average, whether the shipowner's sacrifices should receive contribution or not. It would have been a case of general average even if there had been but one interest to contribute. Montgomery v. Indemnity Marine Ins. Co. (1901), 1 Q. B. 147; (1902), 1 K. B. 734; Potter v. Ocean Ins. Co., 3 Sumn. 27; Risley v.