Botsford v. Union Marine Ins. Co., 59 F. 161 (7th Cir. 1893)

December 1, 1893.)

No. 97.

1. Shipping — Genbbaj, Average — Damage in Extinguishing Fire.

Damage by water poured on cargo to extinguish fire, by request or direction of tlie officers of tlie vessel, is a proper subject of general average. 46 Fed. 297, affirmed.

2. Same — Statutory Exemption.

Rev. St. § 4282, which exempts the owner of a vessel from liability for damage to cargo by fire happening without his design or neglect, does not release him from liability to contribute towards general average. 46 Fed. 297, affirmed.

8. Same — Exceptions in Bill oe Lading.

Glauses in a bill of lading, exempting the carrier from liability for any loss or damage arising from fire and wet, and giving Mm the benefit of the insurance, do not exempt the vessel from a general average claim by the underwriters for damage caused in extinguishing fire, since the bill of lading- only affects rights and liabilities incident to the contract of carriage. 53 Fed. 270, affirmed.

Appeal from the District Court of the United States for '¡he Eastern District of Wisconsin.

In Admiralty. Libel by the Union Marine Insurance Company of Liverpool, England, the Insurance Company of North America, and the Atlantic Mutual Insurance Company of New York against-the steamer Koanoke, W. F. Botsford, C. D. Thompson, and James W. Martin, claimants for contribution in general average. Exceptions to tlie libel were overruled, (46 Fed. 297,) and a decree rendered for libelants, (53 Fed. 270.) Claimants appeal. Affirmed.

Statement by SEAMAN, District Judge:

Libel was filed against the steamer Roanoke, by the appellees, as underwriters upon her cargo, claiming general average contribution for sacrifice of cargo under the following circumstances: On the evening? of May 17. 1890, while tlie steamer Roanoke was lying at her dock at Buffalo, and taking on a cargo of merchandise, including a quantity of jute, hound for Toledo, fire was discovered in the midship hold, in some bales of jute. Tlie officers of the vessel gave alarm, which brought the fire department and fire tug to their assistance. The lines were cut, and the vessel removed from her dock, and water poured upon her and 'into the hold. The fire was apparently quenched about 10:30 P. M., the damage to the steamer being confined to tlie upper works and main deck; but water was necessarily poured into the hold throughout the night, because of smoldering fire in the Jute. On (he morning of May 19th, fire again appeared in the jute, and was extinguished by throwing in water for an hour. The steamer departed for Toledo at 3 P. M., ihe 19th. At intervals on tlie voyage, and after arrival, during the unloading, up to completion, May 22d, fire was breaking out-in the jute, and only kept down, and finally extinguished, by streams of water thrown in, through the steamer’s hose, at each outbreak. The damage 1o the cargo by the water.thus employed is undisputed. There was a general average statement, and the libelants paid thereupon, to the cargo owners, respectively, tlie amounts 'so adjusted for damages by water, in addition to fire damage. Decree was for libelants thereupon, for the damage by water, 82,505.62, and the owners of tlie steamer appeal.

George D. Van Dyke and P. H. Phillips, for appellants.

John O. Richberg, for appellees.

Before WOODS, Circuit Judge, and BAKER and SEAMAN, District Judges.

SEAMAN, District Judge, (after stating the facts.) Against the allowance of general average in this case, and especially against recovery by the insurers, the appellant raises four points of objection, which were clearly presented and ably argued. They are of importance to the various shipping interests, in some respects, at least, not settled by precedents, and will be considered under the following inquiries: (1) Independent of statute or contract, do the facts make a case for general average? (2) Does the statute— section 4282, Rev. St. U. S. — apply to general average contribution ? (3) Do the exemptions from liability contained in these bills of lading save the carrier from such contributions? (4) Is general average liability included in the clause giving the carrier the benefit of shipper’s insurance?

1. The question which must be determined primarily is whether the destruction of property on shipboard, by water pumped or poured onto it, through the hatches or otherwise, to rescue ship and cargo from peril by fire, constitutes such sacrifice of a part for the whole adventure as will meet the requirements for general contribution. . The conceded facts here show a common peril; and the saving flood of water, although furnished by the fire department of Buffalo at the first outbreak of the fire, was invoked by the officers of the vessel, and, at the subsequent appearances, Avas entirely under their charge. Vessel and remaining cargo were saved, but at the expense of destruction by Avater of the portion of the cargo for which contribution is claimed. The district court held that it wTas a case of general average, and the opinion there filed— reported in 46 Fed. 297 — well states the grounds for so holding, and, the authorities in support, and is adopted here for answer to the first question.

2. The next inquiry — -whether section 4282, Rev. St., exempts the vessel from contribution in such case — does not appear to have been raised heretofore in the courts of this country. This statute was first enacted in 1851, and now appears in the Revised Statutes

under the general tide of “Commerce and Navigation,” and the subtitle of “Transportation of Passengers and Merchandise.” It. provides as follows:

Tl is evident, front the provisions in pari materia with this, that the legislative intent was to relieve the earner from a liability which had theretofore entered into the contract for carriage of goods. This object is recognized in Moore v. Transportation Co., 24 How. 1, and the opinion states: “The decision in the case of The Lexington, which Avas burned upon Long Island sound, led to this act of 1851,” — referring to New Jersey Steam Nav. Co. v. Merchants’ Bank, 6 How. 344, where the carrier was subjected to liability for a loss of goods by fire in transit, under the rule at common law. By that rule the carrier beca,me absolutely responsible for the safely of the goods intrusted to him for transportation, excepting only for acts of God or the king’s enemies. The liability as an insurer, which was thus imposed by the common law, had proved onerous and discouraging when applied to eases of loss by accidental fire, and relief had been extended in England by statute; this similar enactment folloAved here. Both the circumstances' and the context show that this provision was intended only to ailed the contract for carriage, so that this-insurance against loss by fire should no longer be implied as a part of that contract.

The rule for contribution in general average is older than, and entirely aside from, the common law; is a rule both of equity and policy, which has come down through the centuries from an old Rhodian law, adopted in the Roman jurisprudence, and thence entered into the general maní ime law. It appears to have been preserved in England without enforcement by statute. It applies only to shipping, and prescribes that in all cases of imminent peril to the whole adventure, Avhere release is obtained by intentional sacrifice of any part for the benefit of the residue, contribution shall he made by the saved portions for that Avhich tvas so sacrificed. The common peril takes from the master of the vessel his paramount obligation to his \rossel OAA’ners, and charges him with a joint agency for the owners of cargo and vessel, to act impartially, decide when a sacrifice is necessary, and select for sacrifice that aaIucIi will best seiwe the interest of all to avoid the peril. This general average contribution is not dependent upon contract, hut is “built upon the plainest principles of justice,” (3 Kent Comm. 233,) and is aside from contract,, (The Eagle, 8 Wall. 23:) “It is the safety of the property, and not of the voyage, vA'hich constitutes the true foundation of general average.” Insurance Co. v. Ashby, 13 Pet. 331. The Aressel is made to contribute, as well as the cargo saved, not because of its undertaking to carry, or out of any duty as earner, but because it. had encountered peril, and had been saved to the owners by a sacrifice of other property.

It therefore appears that the adoption of this statute, which is now invoked to relieve the vessel from contribution, found in force these well-known rules, in no respect dependent upon each other, and of separate origin, — -the one from the common law, and the other from the maritime law. That from the common law was harsh, imposing upon the contract of carriage an absolute insurance, against loss b y fire, and clearly within the legislative view for relief; the other, for general average, was an ancient rule of the highest equity, not touching that contract, but applicable only to an emergency of great peril to the whole adventure, — a rule of mutual benefit and value, protecting vessel and cargo when peril arose. The statute makes no mention of general average. The legislative intent was clear to relieve the carrier from the onerous contract liability, for the encouragement of vessel interests; and that intent furnishes the key to the meaning of the statute, unless its language is so broad and unmistakable that it cannot be limited to that purpose. The appellants' contention is that the terms here employed — that the owner "shall not be liable to answer for or make good” any loss or damage which may happen to merchandise “by reason or by means of any fire,” in the absence of negligence— must be held to include this damage by wetting of the goods; that, although general average is not allowed for damage by fire, it is here given for the wetting, which was “by reason” of the fire, and its direct consequence; that the uniform rule of construction which has been applied to policies of insurance against fire, to cover such damage by water as well, must* govern here. .The basis for general average allowance constitutes the distinction. It is not predicated upon any accidental damage or loss; it is not an indemnity for particular goods from any peril or loss by fire, and cannot arise if the peril is only of this portion, and not common, but accrues only in the case of a voluntary sacrifice of a portion to release the whole adventure from peril of storm, fire, or other stress, — and the sacrifice may be made by jettison, stranding, scuttling, or, as here held, by pouring in water; and contribution is charged upon the beneficiaries as such, whether cargo or vessel, or both. The peril is often such that the vessel must be the subject of sacrifice, either in whole or partial, or must incur extraordinary expense to save the cargo or residue, and then its owner receives the general average contribution. Surely, it cannot have been intended that the vessel should retain this benefit without sharing its burdens. We are of opinion that the general words of this statute do not warrant a construction which would disturb these just and valuable rules, which would tend to discourage impartial conduct by the master in cases of peril, and that this statute does not affect general average.

3. The bill of lading in question contains a clause that the carriers shall not he liable for any loss or dáinage “arising from, caused by, or connected with” certain specified causes, among which are mentioned fire, wet, combustion, and heating. This special clause is urged in behalf of the appellants to exempt the vessel from the general average claim in question, while it is conceded that the ordinary terms found in the contract, viz. “to he transported in like1 good order and condition, dangers of navigation, fire, and collision only excepted,” does not so operate. Vide Nimick v. Holmes, 25 Pa. St. 366; Schmidt v. Steamship Co., supra. The enlarged details of this hill of lading arc» directed to the contract of carriage, as in the simpler form. All of the causes enumerated are risks incident to the carriage by water or rail intended by this instrument. General average has an entirely different basis, and is aside from the contract relation for carriage, as shown under the preceding point; and the terms here employed do not warrant, a, holding that it was in the minds of the parties to this contract of affreightment as touched thereby. The definition adopted in tlie English cases, under similar special clause, — Crooks v. Allan and Schmidt v. Steamship Co., supra. — is appropriate here, viz.:

á. The stipulation in the hill of lading which gives to the carrier the benefit of insurance must have similar construction, and he held to cover only liability and damage contemplated by the contract to carry the goods. The issue here being upon the allowance of general average, the discussion in Phoenix Ins. Co. v. Erie & W. Transp. Co., 10 Biss. 18. and Id., 117 U. S. 312, 6 Sup. Ct. 750, 1176, has no application, as the only contest and ruling there was against, recovery of damages for which the carrier would have been liable as such, hut for similar stipulation in that bill of lading. That case has, however, in its facts, some significance in support of the view here adopted, for it is conceded in behalf of appellant that the insurer there had judgment against the vessel owners for general average contribution by the insured cargo, although it may not he accepted as a clear precedent upon that point, in the absence of a showing of dispute of this liability by the distinguished counsel there engaged.

The decree of the district court is affirmed.