The Philip J. Kenny

AYIS, District Judge. The Ford Motor Company and Cbiarello-Bros. Company, Inc., cacli heretofore filed libels against the New York Towing & Transportation Corporation (hereinafter called the towing corporation), its steamtug Philip J. Kenny and lighter Walter Franks, based upon a claim for damages arising out of a contract for transportation of merchandise for the Ford Motor Company, and a claim of Chiarello Bros. Company, Ine., for-damages alleged to have been sustained be338 cause of injuries to the barge Tripoli owned by it: These cases were duly heard by the court and interlocutory deerees entered in both eases for the amounts claimed, with interest, in rem against the steamtug Philip J. Kenny and in personam against the towing corporation. Reference was made to a commissioner to ascertain the amounts due, and he reported in favor of the Ford Motor Company in the sum of $27,396.15, with interest from April 23, 1931, and in favor of Chiarello Bros. Company, Inc., in the sum of $637, with interest from Apnl 23, 1931. The towing corporation, because the amounts shown by the report appear to be m excess of the value of .the steamtug has filed its petition, praying a limitation of liability, and has filed a stipulation on ex parte proof of value, asking for injunction, etc. . The ^ o£ the towifg coloration to Imitation depends upon the construction of two acts of Congress, which read as follows: “The liability of the owner of any vessel, for -any embezzlement, loss, or destruction, by any person, of any property, goods, or merchandise, shipped or put on board of such vessel, or for any loss, damage, or injury by collision, or for any act, matter, or thing, , n n i , • -j loss, damage, or forfeiture, done, occasioned, or incurred Without the privity, or knowledge of such owner or owners, shall in no case exceed the amount or value of the interest of such owner- in such vessel, and her freight then pending.” 46 USCA § 183. “The individual liability of a shipowner . , .. .. . > r. shall be limited to the proportion of any or ..... ... ,, , , • • .. -i i all debts and liabilities that his individual , „ ,, . . , ,, , , , share of the vessel bears to> the whole; and the aggregate liabilities of all the owners of a vessel on account of the same shall not exceed the value of such vessels and freight pending: Provided, That this provision shall not prevent any claimant from joining all the owners in one action; nor shall the same apply to wages due to persons employed by said shipowners.” 46 USCA § 189. ~ The Ford Motor Company filed its answer, and, upon petition for replication, an n _ r \ . ’ order was made requiring the towing corporation to file a replication, to certain claims in the answer, which was duly filed. Subsequently, counsel for the Ford Motor Company moved to dismiss the petition for limitation, claiming that the towing corporation cannot limit its liability to the value of its tug and pending freight, because of its personal contract with the Ford Motor Company. The personal contract relied upon to pre>-vent the limitation of liability reads as follows: Freight Contract “Between Ford Motor Company and New York Towing & Transportation Corp. “17 Battery Place, New York City «Owner of the Barge Hoister ‘Square/ agrees to let space on ‘gqliare> to Ford Motor oompaily) said space on ‘Square? being suffi-cjent to accommodate about _F c b y _ “ ^ unboxed -iXTo. (Inboxes) _Tons Boxed Parts „Ford Motor Company agree» to pay, tw at fte rate of ${&M d com. menci on deli o£ boister Square? at Ke K j; 1/18/2,g, ^ continuing un-,gquare, at point in watera-. «0wner t& suppl space 0n barge, fully manned and ^ ^ including tarpaulins, and af. all times to be ^ gole conta)1 of . ation navi&ation and management: Ford Motor Company, as lessor of space on hoister <g w to pay ^ towage bills from tim6 of deliyeiy mltiI time of retum; aiso any other- ^ ineui-red by Ford Motor Company, ^ 77 „ , 77 T . “Owner to be liable for arm ana all claims . . . . : * , out °1ownership, maintenance, nmr^on, operaUon control or posses**,» of har?e' Space on barge to be used only with-f barbor limits, New York Barbor’ fd^ for eama§'e o£ above Scribed • All prior oral agreements are merged m , . °, . . . . ... . this written agreement which shall not be al- , . . . ° . , . ... „ tered, varied or modified except m writing, r . ° ' a ies mine‘' *s contended by counsel for the towing corporation that a personal contract made by. a shipowner or owners will not bar his or ^le^r rights limitation, and many eases are quoted establishing the fact that the purpose ae^ o£ Congress was to encourage investment, by exempting the investor from loss in excess of the amount actually inyestecL This was undoubtedly the reason for ^ , c , . the passage of the acts referred to. . , . Counsel fur-thar claims that shipowners cannot be bable for i,er3°nf1 «^tracts for of danfS68 by negligence of ^ 8 cmv and allies that the cases cited by counsel for the Ford Motor Company all Ie£er1t? warranties as to seaworthiness of the vessel involved. The court is convinced, from an examination of the cases bearing upon this ques [339] tion, that the statutes referred to, which must be construed in pari materia, do not interfere with the enforcement of a specific contract, even though it may make a shipowner liable in excess of the amount or value of the interest of such, owner in such vessel, and her freight then pending. In the case of Richardson v. Harmon, 222 U. S. 96, on page 106, 32 S. Ct. 27, 30, 56 L. Ed. 110, Mr. Justice Lurton, who wrote the opinion in the Supreme Court, says: “Thus construed, the section harmonizes with the policy of limiting the owner’s risk to his interest in the ship in respect of all claims arising out of the conduct of the master and crew, whether the liability be strictly maritime or from a tort non-maritime, but leaves him liable for his own fault, neglect, and contracts.” This principle is approved in the case of Pendleton v. Benner Line, 246 U. S. 353, 356, 38 S. Ct. 330, 331, 62 L. Ed. 770, wherein the court said: “The contract was between 1m-» man beings and the petitioner by his own act knowingly made himself a party to an express undertaking for the seaworthiness of the ship. That the statute does not limit liability for the personal acts of the owners dono with knowledge is established by Richardson v. Harmon, 222 U. S. 96, 32 S. Ct. 27, 56 L. Ed. 110. It was said in that case, page 106 of 222 U. S., 32 S. Ct. 27, that section 38 leaves the owner liable for his own fault, neglect, and contracts.’ ” See. also, Luckenbach v. McCahan Sugar Refining Co., 248 U. S. 139, 39 S. Ct. 53, 63 L. Ed. 170, 1 A. L. R. 3522; Capitol Transportation Co. v. Cambria Steel Co., 249 U. S. 334, 39 S. Ct. 292, 63 L. Ed. 631; Amos D. Carver (D. C. S. D. N. Y.) 35 F. 665; Great Lakes Towing Co. v. Mill Transp. Co. (C. C. A. 6) 155 F. 11, 22 L. R. A. (N. S.) 769; The Loyal (C. C. A. 2) 204 F. 930; The E. S. Atwood (C. C. A. 2) 289 F. 737. In addition to the cases referred to and cited, the Circuit Court of Appeals for the Third Cireuit, in the case of Tucker Stevedoring Co. v. Southwark Mfg. Co., 24 F.(2d) 430, specifically holds that the statute is not available to shipowners as against their obligation on specific contracts. In this case, certiorari was denied at 277 U. S. 598, 48 S. Ct. 560, 72 L. Ed. 1007. I agree with the reasoning expressed in that case, and, in addition, feel myself bound by it, unless, and until, some new ruling is made in the circuit or by the Supreme Court. The only other question involved is with relation to the terms and meaning of the contract entered into between the Ford Motor Company and the New York Towing & Transportation Corporation. Did the towing corporation, in this contract, personally assume liability for damages sustained by the Ford Motor Company if caused by the negligence of the crew of the steamiug Philip J. Kenny? Counsel for each party argues that the clause referred to is clear and unambiguous ■ — each construing it to sustain his client’s case. I have had considerable difficulty in coming to a conclusion as to the effect of the clause in the contract, which is claimed to be a personal agreement to pay and satisfy “any and all” damages to the Ford Motor Company’s property by reason of negligent operation of the tug. To my mind, it is not clear. Taking into consideration the other terms of the contract and the surrounding circumstances, I a.m satisfied that this clause was intended to indemnify and save harmless the Ford Motor Company from liability for any damage which might be inflicted on the barge while transporting property of the Ford Motor Company, or from claims which might be made against the barge by third parties “arising out of ownership, maintenance, navigation, operation, control or possession.” The only ease of a similar character, which I have been able to find, is The E. S. Atwood (C. C. A. 2) 289 F. 737, supra. The court in that case held the charterer of a- tug responsible on a personal contract which read as follows: “The contractor will be held responsible for all damage to vessels in the service of the quartermaster while under tow or being shifted, and he shall he held answerable for all damages that may occur to persons, property, animals, etc., or from collision or want of proper lighting, arising through negligence on the part of himself or his employees or trespassers.” A comparison of the two contracts shows a marked difference op obligation, and in that ease a direct responsibility, which justified the court in decreeing personal liability. It appeal’s that the contract in question was prepared by the Ford Motor Company and accepted by the towing corporation. Under these circumstances, if deemed to be ambiguous, it would be my duty to resolve any doubt against the party preparing it. See The Pensacola (C. C. A. 5) 2, 63 F. 661; Drainage Dist. No. 1 v. Rude, (C. C. A. 8) 21 F.(2d) 257. If the Ford Motor Company had intended that the towing corporation should be liable for damages to its property [340] while in transit, it could, and would I believe, have inserted this provision clearly in the contract. The petition for limitation will be allowed, and the motion to require further security on appeal will be denied.