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American Car & Foundry Co. v. Brassert

June 24, 1932

AMERICAN CAR & FOUNDRY CO.
v.
BRASSERT



Appeal from the District Court of the United States for the Northern District of Illinois, Eastern Division; George A. Carpenter, Judge.

Author: Sparks

Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.

SPARKS, Circuit Judge.

The question presented by this appeal is whether the libel states sufficient facts to entitle appellant to limit its liability, if there be any liability.

In support of the trial court's ruling that the facts pleaded are not sufficient for that purpose, appellee relies upon three propositions: (1) At the time the boat was destroyed appellant was not the owner thereof within the meaning of the word "owner" as used in the statutes upon which appellant relies. (2) The statutes limiting the liability of owners of vessels do not apply to one engaged solely in the manufacture of gasoline-propelled yachts and cruisers or other vessels.(3) Since the boat was not manned and operated by a master and crew of appellant, there is no liability that can be limited by a court of admiralty.

If appellee's position is correct as to any one or more of the propositions above set forth, the ruling of the trial court must be affirmed.

In determining whether appellant was the owner of the boat at the time of the accident, it is quite necessary to refer to the conditions as they existed at the time of the enactment, as well as to subsequent decisions, in order to gather, if possible, the reasons which prompted the legislation and guided the courts' interpretation of it.

In The Main v. Williams, 152 U.S. 122, 14 S. Ct. 486, 487, 38 L. Ed. 381, the court, in referring to limited liability of shipowners, said:

"The earliest American legislation upon this subject is found in a statute of Massachusetts passed in 1818, and revised in 1836.This was taken substantially from the statute of George II. It was followed by an act of the legislature of Maine in 1831, copied from the statute of Massachusetts.

"The attention of Congress does not seem to have been called to the necessity for similar legislation until 1848, when the case of The Lexington, reported under the name of New Jersey Steam Navigation Co. v. Merchants' Bank, 6 How. 344 [12 L. Ed. 465], was decided by this court. In this case the owners of a steamboat, which was burned on Long Island Sound, were held liable for about $18,000 in coin, which had been shipped upon the steamer and lost. In consequence of the uneasiness produced among shipowners by this decision, and for the purpose of putting American shipping upon an equality with that of other maritime nations, Congress, in 1851, enacted what is commonly known as the Limited Liability Act * * *

"'This statute, whenever applied, must derogate from the direct right of the shipowner against the other ship-owner. * * * It should be so construed as to derogate as little as is possible consistently with its phraseology, from the otherwise legal rights of the parties.' * * * being in derogation of the common law, we think the court should not limit the right of the injured party to a recovery beyond what is necessary to effectuate the purposes of Congress."

In Evansville & Bowling Green Packet Co. v. Chero Cola Bottling Co., 271 U.S. 19, 46 S. Ct. 379, 380, 70 L. Ed. 805, the court said:

"The rule of limited liability of owners of vessels is an ancient one.It has been administered in the courts of admiralty in Europe from time immemorial and by statute applied in England for nearly two centuries. * * * Our statutes establishing the rule were enacted to promote the building of ships, to encourage the business of navigation, and in that respect to put this country on the same footing with other countries. * * * The rule ...


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