The Caledonia/Opinion of the Court

In The Edwin I. Morrison, 153 U.S. 199, 210, 14 Sup. Ct. 823, the language f Mr. Justice Gray, delivering the opinion of the circuit court in the present case, was quoted with approval, to this effect: 'In every contract for the carriage of goods by sea, unless otherwise expressly stipulated, there is a warranty on the part of the shipowner that the ship is seaworthy at the time of beginning her voyage, and not merely that he does not know her to be unseaworthy, or that he has used his best efforts to make her seaworthy. The warranty is absolute that the ship is, or shall be, in fact seaworthy at that time, and does not depend on his knowledge or ignorance, his care or negligence.'

After renewed consideration of the subject, in the light of the able arguments presented at the bar, we see no reason to doubt the correctness of the rule thus enunciated.

The proposition that the warranty of seaworthiness exists by implication in all contracts for sea carriage we do not understand to be denied; but it is insisted that the warranty is not absolute, and does not cover latent defects not ordinarily susceptible of detection. If this were so, the obligation resting on the shipowner would be, not that the ship should be fit, but that he had honestly done his best to make her so. We cannot concur in this view.

In our opinion, the shipowner's undertaking is not merely that he will do and has done his best to make the ship fit, but that the ship is really fit to undergo the perils of the sea and other incidental risks to which she must be exposed in the course of the voyage; and, this being so, that undertaking is not discharged because the want of fitness is the result of latent defects.

The necessity of this conclusion is made obvious when we consider the settled rule in respect of insurance, for it is clear that the undertaking as to seaworthiness of the shipowner to the shipper is coextensive with that of the shipper to his insurer.

That rule is thus given by Parsons (1 Mar. Ins. 367): 'Every person who proposes to any insurers to insure his ship against sea perils, during a certain voyage, impliedly warrants that his ship is, in every respect, in a suitable condition to proceed and continue on that voyage, and to encounter all common perils and dangers with safety. * *  * This warranty is strictly a condition precedent to the obligation of insurance; if it be not performed, the policy does not attach; and, if this condition be broken, at the inception of the risk, in any way whatever and from any cause whatever, there is no contract of insurance, the policy being wholly void.'

In Kopitoff v. Wilson, 1 Q. B. Div. 377, 381, although, as there was no necessity to consider the law as to latent defects, whether such defects would constitute an exception cannot be said to have been passed on, the general rule was laid down as we have stated it, and the existence of the warranty in question on the part of a shipowner was asserted with reference to his character as such, and not as existing only in those cases in which he is also acting as a carrier. That was an action in which the plaintiff sought to recover damages for the loss of a large number of weighty iron armor plates and bolts, one of the plates having broken loose and gone through the side of the ship, which, in consequence, went down in deep water and was totally lost with all her cargo. The case was tried before Blackburn, J., who told the jury as matter of law that the shipowner warranted the fitness of his ship when she sailed, and not merely that he had honestly and in good faith endeavored to make her fit, and left the following questions to the jury: 'Was the vessel at the time of her sailing in a state, as regards the stowing and receiving of these plates, reasonably fit to encounter the ordinary perils that might be expected on a voyage at that season from Hull to Cronstadt? Second. If she was not in a fit state, was the loss that happened caused by that unfitness?' The rule for new trial was discharged in view of the warranty by implication that the ship w § in a condition to perform the voyage then about to be undertaken, and Field, J., among other things, said: 'It appears to us, also, that there are good grounds in reason and common sense for holding such to be the law. It is well and firmly established that in every marine policy the assured comes under an implied warranty of seaworthiness to his assurer, and, if we were to hold that he has not the benefit of a similar implication in a contract which he makes with a shipowner for the carriage of his goods, the consequence would be that he would lose that complete indemnity against risk and loss, which it is the object and purpose to give him by the two contracts taken together. Holding as we now do, the result is that the merchant, by his contract with the shipowner, having become entitled to have a ship to carry his goods warranted fit for that purpose, and to meet and struggle against the perils of the sea, is, by his contract of assurance, protected against the damage arising from such perils acting upon a seaworthy ship.'

This was the view expressed by Mr. Justice Brown, then district judge, in The Eugene Vesta, 28 Fed. 762, in which he said: 'There can be no doubt that there is an implied warranty on the part of the carrier that his vessel shall be seaworthy, not only when she begins to take cargo on board, but when she breaks ground for the voyage. The theory of the law is that the implied warranty of seaworthiness shall protect the owner of the cargo until his policy of insurance commences to run; and, as it is well settled that the risk under the policy attaches only from the time the vessel breaks ground, this is fixed as the point up to which the warranty of seaworthiness extends.' And the case of Cohn v. Davidson, 2 Q. B. Div. 455, was cited, where it appeared that the ship was not in fact seaworthy at the time she set sail, but that as she was found to be seaworthy at the time she commenced to take cargo, she must have received the damage in the course of loading; and Field, J., observed that 'no degree of seaworthiness for the voyage at any time anterior to the commencement of the risk will be of any avail to the assured, unless that seaworthiness existed at the time of sailing from the port of loading. As, therefore, the merchant in a case like the present would not be entitled to recover against his underwriter by reason of the breach of warranty in sailing in an unseaworthy ship, it would follow that, if the warranty to be implied on the part of the shipowner is to be exhausted by his having the ship seaworthy at an anterior period, the merchant would lose that complete indemnity, by means of the two contracts taken together, which it is the universal habit and practice of mercantile men to endeavor to secure.'

The reasons for the strict enforcement of the warranty, in insurance, have frequently been commented on.

In Douglas v. Scougall, 4 Dow, 269, 270, Lord Eldon said: 'I have often had occasion to observe here that there is nothing in matters of insurance of more importance than the implied warranty that a ship is seaworthy when she sails on the voyage insured; and I have endeavored, both with a view to the benefit of commerce and the preservation of human life, to enforce that doctrine as far as, in the exercise of sound discretion, I have been enabled to do so. It is not necessary to inquire whether the owners acted honestly and fairly in the transaction; for it is clear law that, however just and honest the intentions and conduct of the owner may be, if he is mistaken in the fact, and the vessel is in fact not seaworthy, the underwriter is not liable.'

Similarly, Mr. Justice Curtis, in Bullard v. Insurance Co., 1 Curt. 148, 155, Fed. Cas. No. 2,122, stated in his charge to the jury: 'There is an implied warranty connected with marine policies that the vessel, at the outset of her voyage, is seaworthy for the voyage in which she is insured. This obligation is imposed, by law, on the insured for sound reasons. It takes away all temptation t expose life and property to the dangers of the seas in vessels not fitted to encounter or avoid them. It is not a contract that the owner will use diligence to make his vessel seaworthy, but an absolute warranty that she is seaworthy, and if broken the policy is made void.' And Mr. Justice Story, in The Reeside, 2 Sumn. 567, 575, Fed. Cas. No. 11,657, declared 'every relaxation of the common law in relation to the duties and responsibilities of the owners of carrier ships to be founded in bad policy and detrimental to the general interests of commerce.'

As the same warranty implied in respect of policies of insurance exists in respect of contracts of affreightment, that warranty is necessarily as absolute in the one instance as in the other.

In Putnam v. Wood, 3 Mass. 481, 485, the supreme judicial court of Massachusetts, speaking through Parker, J., said: 'It is the duty of the owner of a ship, when he charters her or puts her up for freight, to see that she is in a suitable condition to transport her cargo in safety; and he is to keep her in that condition, unless prevented by perils of the sea or unavoidable accident. If the goods are lost by reason of any defect in the vessel, whether latent or visible, known or unknown, the owner is answerable to the freighter, upon the principle that he tacitly contracts that his vessel shall be fit for the use for which he thus employs her. This principle governs, not only in charter parties and in policies of insurance, but it is equally applicable in contracts of affreightment.'

This early case is cited by Chancellor Kent, who affirms the doctrine in these words: 'The ship must be fit and competent for the sort of cargo and the particular service in which she is engaged. If there should be a latent defect in the vessel, unknown to the owner and not discoverable upon examination, yet the better opinion is that the owner must answer for the damage caused by the defect. It is an implied warranty in the contract, that the ship be sound for the voyage, and the owner, like a common carrier, is an insurer against everything but the excepted perils.' 3 Kent, Comm. * 205.

The high authority of Lord Tenterden (Abb. Shipp., 1st Ed., 146), Lord Ellenborough (Lyon v. Mells, 5 East, 428), Mr. Baron Parke (Gibson v. Small, 4 H. L. Cas. 353, 404), and Lord Blackburn (Steel v. Steamship Co., 3 App. Cas. 86), may be invoked in support of this view, and it is sustained by decisions of this court (The Northern Belle, 9 Wall. 526; Work v. Leathers, 97 U.S. 379; preceding that of The Edwin I. Morrison, which in terms adopts it). The point was distinctly ruled in The Glenfruin, 10 Prob. Div. 103. There a steamship laden with cargo became disabled at sea in consequence of the breaking of her crank shaft. Such breakage was caused by a latent defect in the shaft, arising from a flaw in the welding, which it was impossible to discover. It was held that under his implied warranty of seaworthiness a shipowner contracts, not merely that he will do his best to make the ship reasonably fit, but that she shall really be reasonably fit for the voyage, and that as, when the Glenfruin started, the shaft was not reasonably fit for the voyage, she was unseaworthy, and the owner was liable; and Lyons v. Mells, 5 East, 428; Kopitoff f. Wilson, 1 Q. B. Div. 377; Steel v. Steamship Co., 3 App. Cas. 72, were referred to.

Again, in The Laertes, 12 Prob. Div. 187, a steamship became disabled at sea owing to the breaking of her fly-wheel shaft through a flaw in the welding existing at the commencement of the voyage, but not discoverable by the exercise of any reasonable care, and it was held that she was not seaworthy for the voyage, and that but for a limitation, on the implied warranty, in the bills of lading, there would have been a breach.

The point is thus put by Judge Brown, of the Southern district of New York, in The Rover, 33 Fed. 515, 516: 'This warranty extends to latent defects not discoverable by prior examination. Either t e ship or the freighter must bear such risks. Under the warranty of seaworthiness, the law places this risk upon the ship and her owner.' And see The Lizzie W. Virden, 19 Blatchf. 340, 8 Fed. 624, Blatchford, J.; The Carib Prince, 63 Fed. 266, Benedict, J.; Whitall v. The William Henry, 4 La. 223; Talcot v. Insurance Co., 2 Johns. 124, 128.

It is urged that doubt is thrown upon the doctrine by the reasoning in Readhead v. Railroad Co., L. R. 4 Q. B. 379, L. R. 2 Q. B. 412. There a passenger sought to charge a common carrier for an injury occasioned by the breaking of an axle by reason of a hidden flaw; and the court of exchequer chamber held that a contract made by a general carrier of passengers for hire with a passenger is to take due care (including in that term the use of skill and foresight) to carry the passenger safely, and is not a warranty that the carriage in which he travels shall be free from all defects likely to cause peril, although those defects were such that no skill, care, or foresight could have detected their existence. But the court was careful to point out the broad distinction between the liabilities of common carriers of goods and of passengers, and in the case at bar the shipowner was not only liable as such, but as a common carrier, and subject to the responsibilities of that relation.

That case was decided in 1869, and those of The Glenfruin and The Laertes in 1885 and 1887; yet the latter rulings seem to have been accepted without question, and were certainly unaffected by any attempt to apply a rule in respect of roadworthiness in the carriage of passengers by a railroad to the warranty of seaworthiness in the carriage of goods by a ship.

In our judgment, the circuit court rightly held that the warranty was absolute; that the Caledonia was unseaworthy when she left port; and that that was the cause of the damage to libelant's cattle.

This brings us to the inquiry whether the claimants can escape from the liability which the law imposed upon them by reason of the exceptions in the bill of lading.

These exceptions were: 'The act of God, the queen's enemies, pirates, restraint of princes and rulers, perils of the sea, rivers, navigation and land transit, of whatever nature or kind, restrictions at port of discharge, loss or damage from delays, collisions, straining, explosion, heat, fire, steam boilers and machinery or defects therein, transshipment, escape, accidents, suffocation, mortality, disease or deterioration in value, negligence, default or error in judgment of pilots, master, mariners, engineers, stevedores, or any other person in the employ of the steamship or of the owners or their agents.'

It is claimed that the Caledonia was exempted from the losses caused by her unseaworthiness from the defective shaft at the commencement of the voyage by the exception of 'loss or damage from delays, * *  * steam boilers and machinery or defects therein.'

As is well said by counsel for appellee, the exceptions in a contract of carriage limit the liability, but not the duty, of the owner, and do not, in the absence of an express provision, protect the shipowner against the consequences of furnishing an unseaworthy vessel. Steel v. Steamship Co., 3 App. Cas. 72; Gilroy v. Price [1893] App. Cas. 56; The Glenfruin, 10 Prob. Div. 103; Kopitoff v. Wilson, 1 Q. B. Div. 377; Tattersall v. Steamship Co., 12 Q. B. Div. 297; Insurance Co. v. Hamilton, 12 App. Cas. 484, 490. If the exceptions are capable of, they ought to receive, to use the language of Lord Selborne in Steel v. Steamship Co., 'a construction not nullifying and destroying the implied obligation of the shipowner to provide a ship proper for the performance of the duty which he has undertaken.'

There was no exception in this bill of lading which in express words exempted the shipowner from furnishing a seaworthy vessel at the commencement of the voyage. As the exceptions were introduced by the shipowners themselves in their own favor, they are to be construed most strongly gainst them, and we perceive no reason why the obligation to furnish a seaworthy vessel should be held to have been contracted away by implication. Their meaning ought not to be extended to give the shipowner a protection, which, if intended, should have been expressed in clear terms.

Moreover, the words 'delays,' 'steam boilers and machinery or defects therein,' formed part of a long enumeration of the causes of damages, all the rest of which related to matters subsequent to the beginning of the voyage; and, by another familiar rule of construction, they should be treated as equally limited in their scope.

In Tattersall v. Steamship Co., cattle had been shipped under a bill of lading, by which it was provided that the defendants were to be 'in no way responsible either for their escape from the steamer, or for accidents, disease, or mortality, and that under no circumstances shall they be held liable for more than 5 for each of the animals.' The ship, after carrying a cargo of cattle on a previous voyage, was improperly cleaned, and those on this voyage took the foot and mouth disease. It was held that the liability of the defendants was not limited to 5 for each of the cattle, for the stipulations of the bill of lading related to the carriage of the goods on the voyage, and did not affect the obligation to have the ship fit for the reception of the cattle.

In The Laertes, 12 Prob. Div. 187, cargo was shipped under three different forms of bills of lading, the exceptions in which, so far as material, were respectively as follows: 'Warranted seaworthy only so far as ordinary care can provide.' 'Warranted seaworthy only as far as due care in the appointment or selection of agents, superintendents, pilots, masters, officers, engineers, and crew can insure it.' 'Owners not to be liable for loss, detention, or damage * *  * if arising directly or indirectly *  *  * from latent defects in boilers, machinery, or any part of the vessel in which steam is used, even existing at time of shipment, provided all reasonable means have been taken to secure efficiency.' These exceptions were held to limit the implied warranty of seaworthiness in accordance with the expressed intention of the parties to that precise effect, and for that reason only to take the case out of the general rule.

We are not dealing with the question of how far exceptions may be given effect in particular cases, but whether by those under consideration claimants were exempted from liability from seaworthiness, and we are clearly of opinion that they were not.

Something was said as to protection from liability by reason of the words in the original memorandum of agreement that 'the shipper assumes all risk of mortality or accident, however caused, throughout the voyage.' We agree with the circuit court that the bill of lading can only be considered as the contract between the parties, the memorandum being preliminary merely; but we are also of opinion that the same rule of construction would apply to the memorandum as to the bill of lading, and that the assumption of the risk of mortality or accident throughout the voyage did not constitute an exemption of the shipowner from his obligation to furnish a seaworthy vessel at its commencement.

By reason of the unseaworthiness of the Caledonia, the cattle were not delivered at the time and place when and where they should have been, and loss was incurred through shrinkage in weight from the protracted voyage, and through fall in market value during the delay in arrival.

It is argued that a common carrier is not liable for mere delay and its consequences unless he has been at fault, and that claimants were in this case free from blame because the defect was a secret one. This contention, however, begs the question; for the conclusion upon this record is that claimants are responsible for breach of warranty, notwithstanding the shaft was defective through hidden weakness. No question can be made that the shrinkage was a direct result of that breach, but it is further insisted that changes in market value were too speculative to furnish just basis for recovery. But as it is found as a fact that these parties, at the time of contracting together, knew and contemplated that the cattle were not to be sold before arrival, but were to be sold at the first possible market day after arrival, it follows that the damages by reason of the fall in price were not remote, but flowed naturally from the breach of warranty. Howard v. Manufacturing Co. 139 U.S. 199, 11 Sup. Ct. 500; Cincinnati Siemens-Lungren Gas Illuminating Co. v. Western Siemens-Lungren Co., 152 U.S. 200, 14 Sup. Ct. 523; King v. Woodbridge, 34 Vt. 565; Laurent v. Vaughn, 30 Vt. 90; Ayres v. Railway Co., 75 Wis. 215, 43 N. W. 1122 Deming v. Railroad Co., 48 N. H. 455; Wilson v. Railway Co., 9 C. B. (N. S.) 632; Collard v. Railway Co., 7 Hurl. & N. 79: The City of Para, 44 Fed. 689; and cases cited by the circuit court.

Decree affirmed.