Walker v. The Transportation Company

'AN act to limit the liability of ship-owners and for other purposes,' passed by Congress March 3, 1851, enacts by its first section that no owner or owners, of any ship or vessel, shall be liable to answer for any loss or damage which may happen by reason or means of fire on board said ship or vessel, 'unless such fire is caused by the design or neglect of such owner or owners.' The same section contains a proviso that 'nothing in the act shall prevent the parties from making such contract as they please, extending or limiting the liability of such owner.' And the sixth section enacts that 'nothing in the preceding sections shall be construed to take away or affect the remedy to which any party may be entitled against the master, officers, or mariners of such vessel for negligence, fraud, or other malversation.' Another, that the act shall not apply to the owners of vessels engaged in 'inland navigation.'

With this act in force, Walker & Co. shipped, at Chicago, a cargo of grain on a vessel belonging to the Western Transportation Company, common carriers upon our northern lakes, to be delivered at Buffalo. The vessel caught fire, and the grain was burnt up. Walker & Co. accordingly filed a libel in personam against the company in the District Court for Northern Illinois for the value of the wheat.

The company, admitting the receipt of the wheat on board the vessel and the failure to deliver, set up three defences:1. That the wheat was destroyed by fire, which was not caused by the 'design or neglect' of the defendant. This article of the defence being obviously framed so as to profit by the act of 1851.

2. That the wheat was received on board, with reference to the terms of the bills of lading usually given by the respondent, which contained an exception of the dangers of navigation, fire, and collision.

3. That the wheat was received on board with the understanding that the usual bill of lading, common in that trade, should be given and accepted as the contract between the parties; and the article averred that such bill of lading contained a clause exempting the ship-owner from liability for loss by 'perils of navigation, perils of the sea, and other equivalent words;' and that by usage and custom, those words included loss by fire, unless the fire had been caused by the negligence or misconduct of the owner or his servants or agents. It then averred that the fire did not occur through the negligence or misconduct of the respondent, or its servants or agents.

All three of the defences were excepted to in the District Court in 1856; and the case being submitted there without argument, the libel, without any rulings having been made on the exceptions, was dismissed.

In 1860 this court, in Moore and others v. The American Transportation Co., decided that, notwithstanding 'inland navigation' was excepted in it, the act of 1851 applied to vessels navigating our northern lakes. The libellants, then perceiving the advantage to be gained in the face of the act by the admission impliedly made on the other side that the cargo had been shipped and received with an understanding that if fire occurred through the negligence of the owner's servants or agents the owner should be liable, amended their libel, admitting in form that such was the understanding and contract on both sides; meaning, now, of course, to place their case-as they did afterwards-on the fact that the fire had been caused by the negligence or misconduct of the owner's servants or agents.

The case was then heard in the Circuit Court, on new testimony taken by both sides as to such negligence and misconduct. No proof however was given in either court as to the alleged understanding, custom, or contract; and this rested on the allegation of the answer and the admission of the amended answer made in the way already stated.

The Circuit Court affirmed the decree of the District Court, dismissing the libel, and the case being now here on appeal, two questions were considered:

1. Whether the owner of a vessel used in the trade on the lakes is liable, independently of contract, for a loss by fire, which occurs without any design or neglect of the owner; although it may be traced to negligence of some of the officers or agents having charge of the vessel?

2. Whether the special contract set up by the respondent, although admitted by the libellants, was founded on a custom which the law would support, and whether or not, therefore, the case was to be governed by the act of 1851?

Mr. Rae, for the appellants; Mr. Spalding, contra.

Mr. Justice MILLER delivered the opinion of the court.