Erastus Cornelius Benedict.

The American admiralty, its jurisdiction and practice, with practical forms and directions online

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at Large, p. 635). A few cases had come before the courts previous
to 1870, in which that statute had been somewhat considered. But
it was not till the decision of the Supreme Court in 1871, in the
case of the City of Norwich,^ in which the statute was held to be
applicable to cases of collision, that the present system can be said
to have been fairly launched. Since that time cases under the stat-
ute have been numerous. And the courts by rule and decision have
fairly settled the practice. The scope of the act has been largely
widened, as well by the decisions of the courts, as by additional
acta of Congress, until now the owner of any vessel whether steamer
or canal boat, employed whether in sea-going or inland navigation,
whether he be an American citizen or a foreigner, and possibly
whether he have been negligent or careful, may obtain from our
courts a limitation, to the value of his interest in the vessel and her
freight pending, of his liability not only for the results of a simple
disaster, but for the results of a disastrous voyage, including all
debts due on account of the vessel save seamens' wages.* It has
even been held that a British corporation might obtain in our coui-ts
such a decree, not only where the disaster occurred on the high seas,
but where it had occurred within English jurisdiction.^ Whether



1 SOU. S. (13 Wall.) 104.

2 Revised Statutes, § 42S2 to 4289; act
of June 26, 1884, (23 Stat, at Large,
p. 57, chap. 121, §18); act of June 19,
1886 (24 id. p. 81, chap. 421, § 4.) It is
a little singular that the Supreme Court

(314)



in its amendment of Rule 54, made Jan.
1891, should have omitted all reference
to these two latter acts.

8 Swenson v. The Oceanic Nav. Co.
17 Alb. Law Jour. p. 285.



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LIMITATION OF LIABILITY. 815

the English courts would hold such a decree valid so as to give the
English shipowner the benefit of our statute instead of the English
statute, is a question.

§ 655. Practice not Uniform. — The proceedings under our stat-
utes and under the rules made by the Supreme Court in reference
to such proceedings,* are so peculiar that I have deemed it advisable
to give a separate chapter to them.

There is not an entii'e uniformity of practice in cases under the
statute in all the districts of the United States. It will therefore be
understood that, unless otherwise stated, I give the practice of the
New York District.

General Considerations.

§ 556. Is the Proceeding in Bern or in Personam or Botli! —

A question meets us at the outset, whose determination may throw
light upon questions of proper procedure, viz. : Is a proceeding in
limitation of liability a proceeding in rem^ or in personam ? The
question has been mooted, but so far as I know, never decided. In
so far as the proceeding is one whose object is to properly divide a
certain fund among certain creditors, it partakes of the nature of
a proceeding in rem^ and certain expiessions of the courts as to the
court's obtaining jurisdiction by its obtaining possession of the fund
agree with that view.^ On the other hand, as it seeks to decree
against certain persons restraining their personal action, it would
seem to be properly an action in personam. It seems to me that the
proceeding should be considered as being both in rem and in perso-
nam^ having therefore the advantages and the forms of both classes
of proceeding.^

§ 557. Wliat are Appropriate Proceedings % — It will be noted
that the language of the statute as to the proceedings Ls very gen-
eral. In Section 4284 of the Revised Statutes it is provided that
"the freighter and owners of the property and the pwner of the
vessel or any of them may take the appropriate proceedings in any
court for the purpose of apportioning the sum for which the owner
of the vessel may be liable among the parties entitled thereto."

But what proceedings are "appropriate?"

* Ad. Rules 54 to 58.

6 Ex parte Slayton, 105 U. S. 451.

• See In re Morrison, 147 U. S. 34.



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THE AMERICAN ADMIRALTY.



Section 4285, which provides that the transfer by the owner of his
interest in the vessel and freight to a trustee shall be " a sufficient
compliance with the requirements " of the statute, points out one
" appropriate " proceeding. But this is not the only one. For the
rules of the Supreme Court provide for other proceedings. And it
may be questioned whether these rules are exclusive ; for, as the
Supreme Court has itself said, the rules " were intended Ui facilitate
the proceedings of the owners of vessels." ^ If at any time it should
appear that some proceeding not therein provided for was in any
case more appropriate for securing the result, it can hardly be
doubted that such a proceeding would be sustained, and as to all
details of proceeding not specifically provided for in the rules this
matter of their appropriateness for the purpose furnishes a criterion.

Thus, neither the statute nor the rules provide for the issuing of a
process to the marshal to seize the vessel on the filing of the peti-
tion. Yet I can see no reason why this method of bringing the res
within the jurisdiction of the court might not be as valid as the con-
veyance of the vessel and freight to a trustee. And I can imagine
cases in which such a seizure by the marshal to hold pending the
appraisement, or a seizure and sale by him might have some advant-
age over the conveyance to and sale by a trustee. I have found one
case in the Southern District of New York in which such a process
was issued; but the vessel was not seized under it, she being at the
time in custody of a state sheriff. I see no reason why such a proc-
ess might not be an "appropriate proceeding." But thus far it has
not been adopted in practice.® And that it is not necessary was
held by the Supreme Court.^

It is to be borne in mind also that, as the Supreme Court held
that the purpose of the statute was to assimilate our law on this
subject to that of the maritime countries of Europe, a reference to
that law may often throw light upon a doubtful question of proced-
ure or of right.



§ 558. Time within wliich the Proceeding may be taken. — The

question arises at the outset, Is there any time, the expiration of
which will cut off the owner of the vessel from the benefit of the
statute ? Plainly he must have the power to set up the statute as



'The Benefactor, 103 U. S. p.
Ex parte Slaylon, 105 U. S. 452.



244;



» And see The John Braraall, 10 Berw
511.

9 In re Morrison, 147 U. S. 14.



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LIMITATION OF LIABILITY. 817

a partial or entire defence, whenever any suit may be brought against
hira or his vessel to recover on a liability to which the statute fixes a
limit. As to the time within which he may institute an independent
proceeding on his own behalf, there seems to be no limit fixed as
yet except the one referred to by the Supreme Court in the case of
The Benefactor,^ viz., the actual payment by him of his liability.

§ 559. Scope of the Limitation. — The language of the statutes
on this point is not clear. When the statute says that the liability
of the owner " shall in no case exceed the value " of his interest
(Rev. Stat. § 4283), or that ^^ the aggregate liabilities of all the
owners of a vessel on account of the same shall not exceed the
value of such vessel and freight pending" (Act of June 26, 1884,
§ 18) how far does that language extend ? Can it mean that own-
ers can run a vessel for an indefinite time or number of voyages, and
at the end limit their liability, for all the transactions of all the time
or all the voyages, to the value of the vessel and her freight pending
at the end ? Or is it the liabilities arising out of some one disas-
ter alone against which the ownera can limit their liability ? Neither
of these views should be taken. The Supreme Court in considering
the question of the time at which the value of the interest of the
shipowner should be estimated, held that the proper time was not
the occurrence of any particular disaster, but the end of the voy-
age. It would seem to be the reasonable inference that the liabili-
ties affected by the limitation must be the liabilities of the voyage.
And so it has been held.^^ The voyage is to be taken as the unit
on both sides of the question.

It follows that, whenever the owner shall take his proceeding to
limit his liability, he must take it as of the time of the end of the
voyage out of which the liabilities against which he seeks to limit
his liability arose. That is the time as to which the value of the
vessel and freight pending is to be fixed, and that is the time when
the liabilities to be limited must be ascertained.^

The construction of section 4285 as to the transfer of the vessel
and freight to a trustee must be affected by this consideration. For,
while the owner of a vessel which on a voyage had sunk another



w lOB U. 8. 258.

" The Alpena, 8 F. R. 280; Gokey v.
Fort, 44 F. R. 864; The Aona, 47 F. R.
525.



"The City of Norwich, 108 U. S.
p. 490; The Great Western, id. p. 525;
The Doris Eckhofif, 30 F. R. 140.



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318 THE AMERICAN ADMIRALTY.

vessel would not be compelled to take his proceeding to limit his
liability at the end of such voyage, but may wait till the end of a
subsequent voyage or later, yet if he does wait and on such subse-
quent voyage his vessel should receive injury, his conveyance of her
in her injured condition to a trustee could hardly be held to be the
" suflBcient compliance " with the requirement of the statute, spoken
of in section 4285. I am not aware of any such case. The value
has been arrived at, in all the cases brought before the courts where
inteimediate voyages had been had, bj'^ appraisement as of the time
of the end of the voyage, and not by conveyance to a trustee. If,
in such a case, the owner should convey his vessel to a trustee it
would seem to be an "appropriate proceeding" that the court
should order nevertheless an appraisement of her value as of the
end of the voyage against whose results the limitation of liability
was sought, and should compel the owner, as a condition of his ob-
taining his decree of limitation, to pay into court the difference be-
tween such appraised value and her value when conveyed to the
trustee.

But in the case of a vessel not making regular voyages, as for
instance, a tug engaged in harbor towing, or a lighter or ferryboat
which makes many trips a day, is any different rule to be adopted?
So far as losses occasioned by a disaster to such a vessel are con-
cerned, there would be no difl&cult)', for the disaster would be the
same, whether it occurred on a long vo3'age or a short one. But
the language of the Act of 1884, which extends the limitation to all
liabilities, on account of the vessel, words which would include
debts for her ordinary expenses which could hardly be held to have
arisen " without the privity or knowledge of the owner," presents
a different question of time. And yet, as that statute also uses the
words " freight pending," which the Supreme Court held in its con-
struction of the previous statute to be significant of a particular
voyage, it seems still that the voyage, whether long or short should
be held to be the unit, whether in fixing the liabilities limited, or
the amount of the limitation.

660. The Mode of Procedure. — An owner of a vessel who de-
sires to avail himself of the benefit of the acts, may not find it nec-
essary to institute any proceeding himself. For one suit may be
brought against his vessel or against himself, on behalf of all, who
hold claims which have arisen during the voyage, or have debts due



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LimTATION OF LIABILITY.



319



them on account of the vessel. In that case he may obtain the
benefit of the act by his answer in that suit, or even by exception
to a libel.^

In the case of The Maria Elizabeth,^* the District Court of New
Jersey in 1882 held that owners seeking the benefit of the act must
obtain it by an aCBrmative proceeding, and could not have it in the
suit against the vessel. But the attention of the court in that case
^could not have been called to the case of Dyer v. The National
Steamship Cb.,^^ ownei-s of the Scotland, decided in 1881. In that
case the defendants had only averred in their answer that their ves-
sel " was by said collision, sunk and destroyed and that there is no
liability in personam against these respondents" for the loss. But
the Supreme Court allowed them the benefit of the limitation of lia-
bility under the statute, and ordered a reference in the suit to ascer-
tain the amount to which their liability should be limited. In the
case of The Manitoba,^^ the owners of the steamer, which had been
seized on a libel against her, filed a petition in that suit, setting up
that the claim was greater than the vessel and freight, and praying
an appraisal of the vessel and her freight, which, being had, they
gave a bond for the amount and then by answer in the cause set up
these proceedings and prayed the benefit of a limitation of lia-
bility under the statute to the amount of the bond, which the Su-
preme Court, while decreeing against them for the amount of the
bond, awarded. It is manifestly the correct practice, whether the
suit be against the vessel in rem, or the owner in personam^ that the
ship in defending should aver that the limitation of liability is
claimed under the statute.

But if no suit has been brought, or if the suit brought does not
include all claims arising during the voyage, or debts against the
vessel, or if several suits are brought, the owner of the vessel, if he
wishes to limit his liability under the statutes, must himself institute
a proceeding for the purpose.^^ Unless this is done he might per-
haps be decreed, in each one of several successive suits, to pay the
claim up to the limit of the value of the vessel and pending freight.



§ 561. The Conrt. — A question has been raised whether a ship-



w The Scotland, 118 U. S. 507; Mil-
ler V, O'Brien, 35 F. R. T79; The Doris
EckhofP, 30 F. R. 140.

»< 11 F. R. 620.



" 105 U. S. p. 604.
" 122 U. S. 100.

17 But see The Rosa, 52 F. R. 132; and
Quinlan v. Pew, 66 F. R. 111.



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320



THE AMERICAN ADMIRALTY.



owner can obtain the benefit of the acts by proceeding in any otiier
court than a Court of Admiralty.^^ It has been held that he can-
not. But, however that may be, we are only concerned with the
proceedings when taken in the Admiralty.

A question was also raised and was not entirely settled, whether
such proceeding by the owner could be taken in any Admiralty
Court but the District Court. The amendment to Rule 58, promul-
gated March 1881,^^ seemed to apply only to such proceedings as were
brought to the Circuit Court by appeal and hence had been begun in
a District Court. In the case of The Mary Lord,^^ a vessel was held
liable in the District Court and on appeal to the Circuit Coui-t the
decree was affirmed, and thereupon her owners filed in the suit a peti-
tion to limit their liability. The Circuit Court, however, dismissed
the petition, holding that it should be filed in the District Court.

Under the former practice on an appeal to the Circuit Court the
fund, as for instance where a vessel had been sold, was brought into
the Circuit Court. Occasions might have arisen in which there
would have been difficulty in instituting a proceeding in the District
Court while the fund was in the Circuit Court. But under the
present statute appeals are taken to the Circuit Courts of Appeals
instead of to the Circuit Courts, and the Circuit Courts of Appeals
do not execute their own decrees but remand them for execution to
the District Courts. The difficulty suggested therefore can no lon-
ger arise. And it may therefore be said as a general rule that the
proceeding of the shipowner is to be taken in the District Court.

§ 562. The Proper District. — The next question which piesents
itself is to determine which district is the proper district. For
this puipose the Supreme Court promulgated Rules 64 and 57.^^

Under the rules as first promulgated, the cases provided for seem
to have been only three, viz., when the ship should have been libel-
led, or when the owner should have been sued, or both (Rule 54).
And Rule 57 provided, that, if the ship had been libelled, the pro-
ceedings might be in the district where she had been libelled, and
that, if she had not been libelled, the proceedings might be in the
district where the owner had been sued.



»^ Elwell V. Geibel, 33 F. R. 71, (In
Equity, wrongly reported as In Admi-
ralty;) Goodrich Trans. Co. v. Gagnon,
30 id. 123.



i» 103 U.S. XIII. & 239.
*'31 F. R.416.

2>Ex parte Slayton, 106 U. S. 402; Ex
parte Phoenix Ins. Co., 118 id. 623.



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^LIMITATION OF LIABILITY. 821

But in April, 1889, the Supreme Court amended Rule 57 so as to
provide for the institution of a proceeding by a shipowner before
any suit is begun either against himself or his vessel. And although
the 54th Rule, even as amended by the Supreme Court in 1890,
mentions only the cases where suit has been brought against the
vessel or against the owner, it is the 57th Rule as amended which
prescribes what shall be the proper district for all cases. The
words of that rule, "the said proceedings may be had," clearly refer
tr> the proceedings mentioned in the previous rules, which may
therefore be taken in all cases mentioned in the 57th Rule. It is to
that rule therefore that we must look to determine the proper dis-
trict for the proceeding. That rale as amended in April, 1889, is
as follows:^

" The said libel or petition shall be filed and the said proceedings
had in any District Court of the United States in which said ship
or vessel may be libelled to answer for any such embezzlement, loss,
destruction, damage or injury ; or, if the said ship or vessel be not
libelled, then in the District Court for any district in which the said
owner or ownei-s may be sued in that behalf. When the said ship
or vessel has not been libelled to answer the matters aforesaid and
suit has not been commenced against the said owner or owners, or
has been commenced in a district other than that in which the said
ship or vessel may be, the said proceedings may be had in the Dis-
trict Court of the dijstrict in which the said ship or vessel may be,
and where it may be subject to the control of such court for the
purposes of the case as hereinbefore provided. If the ship have al-
ready been libelled and sold, the proceeds shall represent the same
for the purposes of these rules."

§ 563. Three Cases provided for by Rules.— A Fourth Case.— It

is a question whether these rules of the Supreme Court are exclu-
sive even as to the cases which their language covers, for the Su-
preme Court has held that the intention of the rules was " to
facilitate the proceedings of owners of vessels " ^ and not apparently
to restrict them.

But the language of the 57th Rule seems to provide for the three
following cases.

1. Where the vessel has been libelled and she or her proceeds is
in custody (for the word " libelled " in the rule, cannot mean merely

« 130 U. S. 705.

» The Benefactor, 108 U. S. 244.

21



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822



THE AMERICAN ADMIRALTY.



the filing of a libel without arrest) and no suit has been brought
against her owner.

2. Where the vessel has not been libelled, but her owner has been
sued.

3. Where the vessel has not been libelled and her owner has not
been sued.

There is a fourth case, not provided for in the rule, viz. :

4. Where the vessel has been libelled and the owner has also
been sued.

In the first case by the rule the petition must be filed in the dis-
trict in which the vessel or her proceeds is libelled and in custody.

In the second case it must be filed in the district in which the
owner has been sued, or in the district in which the vessel may be.

In the thiid case it must be filed in the district in which the ves-
sel may be.^

And by the " vessel *' is meant not only the vessel as a whole, but
any salvage from her if she is lost, or the proceeds if she has been
libelled and sold.

But there is a branch of this third case which is not provided for
by the rule, viz. : the case where the owner has not been sued and
the vessel may not be in any district — may be in a foreign country
or totally lost.

In the case of The Job M. Leonard,^ where the vessel had been
totally lost, a petition filed by her owners in a district in which
none of them resided or had been sued, but in which they were
prosecuting a suit against the owners of the vessel which had caused
the loss, was held to have been rightfully filed.

In the fourth case it has been decided that the petition may be
filed in the district in which the vessel has been libelled ; and if the
owner has been sued in another district it has been held that it
could not be filed in such other district.^

It is possible that the words "in which the owner may he sued ''
in the rule might be held to mean " in which it is possible to bring
suit against the owner *' rather than " in which the owner may have
been sued."

If it should be so held, inasmuch as it would be possible to sue



»* The Alpena, 8 F. R. 280; Black v.
South. Pac. R. R. Co., 39 id. 585 ; Ex parte
Slayton, 105 U. S. 451; In re Morrison,
147 id. 14; John Bramall, 10 Ben. 511.



» 14 F. R. 53.

«»The City of Norwich, 118 U. S*
p. 468; The Luckenbach, 26 F. R. 870.



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LIMITATION OP LIABILITY. 328

the owner in any district in which he may be pei-sonally served with
process or compelled to appear by attachment of his property, it
would follow that the owner might lile his petition in any district
in which he was personally present or had property that could Imj
attached.*^ Whether this be so or not, I have no doubt that, in the
branch of the third case which is unprovided for, the district in
which the owner resided would be held to be the proper one.

In the fourth case the proper district would seem to be the one
in which the vessel has been libelled.

§ 564. The Libel or Petition.— The district in which the libel or
petition is to be filed being determined, the next step is the prepara-
tion of the libel or petition.

The petition may be entitled as a libel by the shipowner against
his own vessel and pending freight and against the libellants or
plaintiffs in suits already instituted against his vessel or the owner,
if any such there are^and against all others interested. The simpler
and undoubtedly better way, however, is to entitle the pleading
" In the matter of the petition of John Doe, owner of the Ship
Dreadnaught, for a Limitation of Liability."

In the Southern and Eastern Districts of New York the courts
have adopted the following rules as to pleadings in limitation pro-
ceedings.

Rule 73.

Petitions or libels to limit liability must state :

(1) The facts showing that the application is properly made in
this district.

(2) The voyage on which the demands sought to be limited arose,
with the date and place of its termination ; the amount of all de-
mands including all unsatisfied liens or claims of liens, on contract
or on tort, arising on that voyage, so far as known to the petitionei-s,
and what suits, if any, are pending thereon ; whether the vessel was
damaged, lost or abandoned, and if so, when and where ; the value
of the vessel at the close of the voyage or in case of wreck, the value
of her wreckage strippings or proceeds, if any, as nearly as the
petitionei'S can ascertain, and where and in whose possession they
are ; also the amount of any pending freight, recovered or recov-
erable. If any of the above particulates are not fully known to
the petitioner, a statement of such particulars according to the best
knowledge, information and belief of the petitioner, shall be suffi-
cient.

'^Swenson c. Oceanic Steam Nav. Co., 17 Alb. Law Jour. p. 286.



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824 the american admiralty.

Rule 74.

If a surrender of the vessel is oflfered to be made to a trustee, the
libel or petition must further show whether there is any prior para-
mount lien on the vessel, and whether she has made any, and if so, what
voyage or trip since the voyage or trip on which the claims sought
to be limited arose, and any existing lien or liens, maritime or do-
mestic, arising upon any such subsequent voyage or trip, with the



Online LibraryErastus Cornelius BenedictThe American admiralty, its jurisdiction and practice, with practical forms and directions → online text (page 33 of 80)