American Stevedores v. Porello/Opinion of the Court

Porello, a longshoreman, was injured in 1942 while working in the hold of the U.S.S. Thomas Stone, a public vessel of the United States. His employer, American Stevedores, Inc. (called American hereinafter), was engaged in loading the vessel under a stevedoring contract with the United States. Within two weeks of the accident which caused the injuries American's insurance carrier, in compliance with § 14 of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950, 33 U.S.C.A. §§ 901-950, and without the compulsion of an award of compensation by a deputy commissioner under § 19, began compensation payments to Porello, who negotiated the checks he received. In March of 1943 Porello gave notice in accordance with § 33(a) of election to sue the United States as a third party tortfeasor rather than to receive compensation. In the same month he filed a libel, amended in November, 1943, to recover damages from the United States under the Public Vessels Act of 1925, 46 U.S.C. § 781 et seq., 46 U.S.C.A. § 781 et seq., for the injuries to his person sustained in the accident. Exceptions to the libel being overruled, the United States answered, denying fault on its part and claiming sovereign immunity from suit. Later, by a petition charging American with fault and setting forth an indemnity provision of the stevedoring contract, the United States impleaded American. American then answered the libel, denying fault and asserting as an affirmative defense that, by accepting compensation payments, Porello had lost his right to sue a third party tortfeasor.

The District Court held that Porello was not barred from maintaining the action. At trial it appeared that a beam lying athwart a hatch had fallen into he hold and struck Porello, causing the injuries complained of. The court held that the United States was negligent in not providing a locking device on the end of the beam, and held that American was negligent through its foreman, whose orders to the operator of a cargo boom caused the beam to be dislodged. Porello was awarded damages from the United States, the United States to receive contribution from American as a joint tortfeasor to the extent of half the damage less the compensation payments received by Porello. On cross appeals by the United States and American the Circuit Court of Appeals held that American was bound by the indemnity provision of the stevedoring contract to make the United States completely whole. With that modification it affirmed the decree below. 2 Cir., 153 F.2d 605. The important issue in this proceeding is whether the Public Vessels Act makes the United States liable for damages on account of personal injuries. The Circuit Court of Appeals thought that this question was decided by the Canadian Aviator case, but since the issue was not squarely posed in tha case we granted certiorari in order to determine it at this time. 328 U.S. 827, 66 S.Ct.

The Public Vessels Act provides that a 'libel in personam in admiralty may be brought against the United States * *  * for damages caused by a public vessel of the United States *  *  * .' Petitioner argues that the Act only provides a remedy for damage to property. 'Damages,' however, have historically been awarded both for injury to property and injury to the person-a fact too well-known to have been overlooked by the Congress in enacting this statute. Nor is it easy to conceive any reason, absent intent to the contrary, not to have inserted the word 'property' in the statute, an obvious method of imposing the limitation for which the petitioner here contends. Petitioner nonetheless argues that the legislative history of the statute conclusively shows that the congressional intent was to limit redress to property damage.

The history of the Act may be briefly detailed. Starting in 1920 various bills were introduced which provided for liability of the Government to suit for damages caused by its vessels. We need only consider, however, the bills that were pending in the 68th Congress by which the present act was passed: H.R. 6989, H.R. 9075 and H.R. 9535. The first provided for suits against the United States 'for damages caused by collision by a public vessel.' The second, designed as an amendment to the Suits in Admiralty Act, and supported by the Maritime Law Association of the United States, would have amended that act so that it would not be limited to vessels operated by the Government as merchant vessels, and would thus have made the United States unquestionably liable to suit for personal injuries caused by public vessels. This bill never reached the floor of Congress. The third bill, H.R. 9535, was enacted and became the present Public Vessels Act. Although 'designed as a substitute for H.R. 6989,' it omitted the words 'by collision' which would have limited the liability of the United States to damages resulting from collisions by public vessels. The only discussion of any significance to the present inquiry related to the last of these bills. It is true, as petitioner points out, that the proponent of the bill in the House, Mr. Underhill, said, when the bill was introduced: 'The bill I have introduced simply allows suits in admiralty to be brought by owners of vessels whose property has been dam ged by collision or other fault of Government vessels and Government agents.' Further, on inquiry as to whether suit could be brought only where blame was charged to the Government, he answered: 'Not entirely; where a man's property is damaged, he can bring a suit.' These statements were not, however, answers to questions whether the Act would provide a remedy for injury to the person as well as to property, nor does it appear that the speaker was at the time attentive to such possible distinctions. It is also true that the Committee report said that 'the chief purpose of this bill is to grant private owners of vessels and of merchandise a right of action when their vessels or goods have been damaged as the result of a collision with any Government-owned vessel.' However, in the same report a letter from the Attorney General was incorporated, which, while it was addressed to the predecessor bill, H.R. 6989, serves, in the absence of contradiction by the report, as an indication of the Committee's opinion on the intended effect of the act. That letter explicitly stated that 'The proposed bill intends to give the same relief against the Government for damages * *  * caused by its public vessels *  *  * as is now given against the United States in the operation of its merchant vessels, as provided by the suits in admiralty act of March 9, 1920.' As the right to sue for personal injuries under the Suits in Admiralty Act was clear, it may be inferred, at least as strongly as the opposite is implied by Mr. Underhill's remarks, that the Committee understood that the Act would provide a remedy to persons suffering personal injuries as well as property damage. Moreover, when the bill reached the floor of the Senate there was not the least indication that the members of that body believed that the Act limited relief to owners of damaged property.

The passage of the Suits in Admiralty Act, the Public Vessels Act, and the Federal Tort Claims Act attests to the growing feeling of Congress that the United States should put aside its sovereign armor in cases where federal employees have tortiously caused personal injury or property damage. To hold now that the Public Vessels Act does not provide a remedy against the United States for personal injuries would in the future only throw this form of maritime action under the Federal Tort Claims Act; for that Act excepts from its coverage 'Any claim for which a remedy is provided by the Act * *  * of March 3, 1925 (The Public Vessels Act) (U.S.C., title 46, secs. 781-790, inclusive) *  *  * .' We cannot believe that the Public Vessels Act, read in the light of its legislative history evinces a Congressional intent only to provide a remedy to the owners of damaged property.

This determination does not dispose of all the issues raised by the Porello case. When impleaded by the United States in the trial court, American, the petitioner here, pleaded as an affirmative defense that Porello, having accepted compensation payments from American, lost whatever right of action he had against the United States as a third party tortfeasor. The petitioner admits that § 33(b) of the Longshoremen's Act was amended in 1938 so that mere acceptance of compensation, without an award, does not operate as an assignment to the employer of the injured employee's cause of action against a third party tortfeasor, a conclusion which courts had reached under the former wording of the Act. But it contends that the amendment did no more, and that acceptance of compensation still operates as a conclusive election not to sue. It is quite clear that mere acceptance of compensation is not the kind of election for which provision is made by § 33(a) of the Act, which provides for notice of intention to the deputy commissioner, so the argument is technically imperfect. But in any event, election not to sue a third party and assignment of the cause of action are two sides of the same coin. Surely the Act was never intended and has never been held to provide that after acceptance of compensation, and until an award, neither employer nor employee could sue the third party tortfeasor. If so held, an employer who was not responsible over to the third party might lose his chance to recoup compensation payments from the third party, while the third party might escape all liability. American, in the unusual circumstances of this case, could have protected itself by controverting the employee's right to receive compensation. In this way it could probably have forced an award and the consequent assignment of the right of action to itself.

Congress has provided that unless an employer controverts the right of the employee to receive compensation, he must begin payments within two weeks of the injury. The employee thus receives compensation payments quite soon after his injury by force of the Act. Yet the Act does not put a time limitation upon the period during which an employee must elect to receive compensation or to sue, save the general limitation of one year upon the time to make a claim for compensation. The apparent purpose of the Act is to provide payments during the period while the employee is unable to earn, when they are sorely needed, without compelling him to give up his right to sue a third party when he is least fit to make a judgment of election. For these reasons we think that mere acceptance of compensation payments does not preclude an injured employee from thereafter electing to sue a third party tortfeasor.

American further argues that the court below, as an admiralty court, did not have jurisdiction of the indemnity provision of the stevedoring contract, and that therefore the decree granting full indemnity to the United States from American was beyond its power. A stevedoring contract is maritime. Atlantic Transport Co. v. Imbrovek, 234 U.S. 52, 62, 34 S.Ct. 733, 58 L.Ed. 1208, 51 L.R.A.,N.S., 1157; The Muskegon, 2 Cir., 275 F. 348. And although admiralty jurisdiction over contracts partly maritime and partly non-maritime in nature is doubtful, the cases raising such doubts are concerned only with contracts for the performance of partly non-maritime activities. See The Richard Winslow, 7 Cir., 71 F. 426; Pillsbury Flour Mills Co. v. Interlake S.S.C.o., 2 Cir., 40 F.2d 439. To sever a contract provision for indemnity for damages arising out of the performance of wholly maritime activities would only needlessly multiply litigation. Such a provision is a normal clause in contracts to act for others and no more determines the nature of a contract than do conditions on the time and place of payment.

Whether the indemnity provision was rightly construed by the court below is a more difficult question. It was provided that:

'The Stevedore performing any service under this shcedule shall be responsible for any and all damage or injury to persons and cargo while loading or otherwise handling or stowing the same, to any ship including its apparel and equipment, wharves, docks, lighters, elevators, cars, and carfloats used in connection therewith, through the negligence or fault of the Stevedore, his employees, and servants.'

The Stevedore, American, contends that it is liable to indemnify the United States only if damages resulted from its negligence alone. Respondent, United States, argues and the court below held, that such an interpretation would render the provision meaningless since the United States would 'be liable only if itself at fault' and that the clear meaning of the provision is that the Stevedore would be liable so long as the accident was caused in whole or in part through its negligence.

American, however, insists that the clause merely stated existing law. On this record we cannot answer the contention of either party. As it stands the clause is ambiguous. Evidence might well have been taken as to the intention of the parties, but was not. It may be that the parties only meant American to indemnify the United States should the Government be held liable for damages solely caused by American's negligence. It may be that the intention was that American should fully reimburse the United States for all damages caused in any part by American's negligence. Finally, the parties may have intended that American, in case of the joint negligence of the parties, should be responsible for that proportion of the damages which its fault bore to the total fault. Although the usual rule in admiralty, in the absence of contract, is for each joint tortfeasor to pay the injured party a moiety of the damages, The Alabama, 92 U.S. 695, 23 L.Ed. 763; The Atlas, 93 U.S. 302, 23 L.Ed. 863; Barbarino v. Stanhope S.S.C.o., 2 Cir., 151 F.2d 553, we do not believe that the last alternative, which provides for a measure of comparative negligence, is necessarily beyond the intent of the parties. Conparative negligence is not unknown to our maritime law. The Max Morris, 137 U.S. 1, 11 S.Ct. 29, 34 L.Ed. 586; The Henry S. Grove, D.C., 22 F.2d 444; see Robinson on Admiralty, p. 91. From the record it is not clear whether the District Court made any finding as to the meaning of the contract. We believe its interpretation should be left in the first instance to that court, which shall have the benefit of such evidence as there is upon the intention of the parties. If the District Court interprets the contract not to apply to the facts of this case, the court would, of course, be free to adjudge the responsibility of the parties to the contract under applicable rules of admiralty law.

We therefore affirm the decree of the Circuit Court of Appeals as to Porello. We reverse so much of the decree as awards indemnity to the United States under the contract and remand the case to the District Court for determination of the meaning of the contract.

The case of United States v. Lauro, No. 514, is here on certificate from the Circuit Court of Appeals for the Second Circuit. The certificate is quoted in full in the note. The only question posed by the case is whether a suit for damages for death by wrongful act will lie under the Public Vessels Act. It is settled that where death 'results from a maritime tort committed on navigable waters within a State whose statutes give a right of action on account of death' the admiralty will entertain a libel for damages sustained by t ose to whom the right is given. Western Fuel Co. v. Garcia, 257 U.S. 233, 42 S.Ct. 89, 66 L.Ed. 210. See discussion in Just v. Chambers, 312 U.S. 383, 388-391, 668, 61 S.Ct. 687, 691-693, 85 L.Ed. 903. Here the death occurred on navigable waters of New York, which has a statute granting a right of action for damages on account of wrongful death. Nor can damages suffered on account of death be distinguished from damages on account of personal injuries. Death is the supreme personal injury. For the reasons stated in the Porello case we conclude that the word 'damages' in the Public Vessels Act, § 1, 46 U.S.C. § 781, 46 U.S.C.A. § 781, means damages under §§ 130-134 of the New York Decedent Estate Law. Accordingly we answer the certificate as follows: The word 'damages' as used in 46 U.S.C. § 781, 46 U.S.C.A. § 781, includes damages under §§ 130-134 of the Decedent Estate Law of the State of New York recoverable by a personal representative because of the death of a human being.

Affirmed in part and reversed in part; question answered.

Mr. Justice FRANKFURTER, with whom The CHIEF JUSTICE concurs, dissenting.