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Marguerite v. Kewaunee

February 2, 1944

THE MARGUERITE; THE FLORENCE J.; LAKEHEAD TRANSP. CO., LIMITED, ET AL.
v.
KEWAUNEE, G.B. & W.R. CO. ET AL.



Appeal from the District Court of the United States for the Eastern District of Wisconsin; F. Ryan Duffy, Judge.

Author: Evans

Before EVANS, SPARKS, and MAJOR, Circuit Judges.

EVANS, Circuit Judge.

This appeal is from a decree entered in an admiralty suit. Two questions are raised: (a) Appellants' urge that they are entitled under the law to exoneration from, or a limitation of, liability for damages to the railroad bridge across the Fox River at Green Bay, Wisconsin, which occurred when their barge collided with the bridge. The appellees are the joint owners of this bridge, and they, in addition to opposing the prayer of appellants' petition, sought by their answer to recover from the appellants, damages which they suffered as the result of the collision. (b) The sufficiency of appellants' fact showing to bring them within the exception to the rule which limits liability to the value of the vessel which caused the damage. One question may be called a legal, - the other a factual issue.

The District Court denied the relief sought by the appellants, - that is, denied them exoneration from all liability, and also refused to limit their liability to the value of their barge.It entered a decree in favor of each appellee for the amount each suffered because of the damage to their bridge, to-wit: $58,956.70 and costs in favor of Kewaunee, Green Bay and Western Railroad Company, and $44,086.30 and costs in favor of the Trustee of the Chicago and North Western Railway Company.

Our determination of the controverted question turns on the application of the exception to the rule limiting the liability of the owner of a vessel, which is found in Sec. 183(a), 46 U.S.C.A. Striking out the words of no materiality in this case and underlining the important clause the section reads:

"The liability of the owner of any vessel, whether American or foreign, for any * * * loss, damage * * * , done, occasioned, or incurred, without the privity or knowledge of such owner or owners, shall not, except in the cases provided for in subsection (b) of this section, exceed the amount or value of the interest of such owner in such vessel, and her freight then pending."

Specifically the words of controlling weight are: "without the privity or knowledge of such owner or owners."

The law is clear that not only must the accused vessel be at fault, but the owners must have known of the fault, which actually contributed to the accident and resulting damage, before full damages can be recovered. Equally well settled is the rule that the owners of the vessel who seek a limitation of liability, to the value of the vessel, carry the burden of taking themselves outside the exception. The burden is on them to show they were "without the privity or knowledge." Petition of Sinclair Navigation Co., D.C., 27 F.2d 606; The Silver Palm, 9 Cir., 94 F.2d 776; In re Reichert Towing Line, 2 Cir., 251 F. 214.

This narrowed inquiry naturally invites consideration of the three more specific, determinative questions: (a) What constitutes knowledge? (b) Who are authorized to bind the owners of the vessel with knowledge by them possessed? (c) Does the evidence show that one authorized to bind appellants knew of, participated in, or caused the negligent action which resulted in the barge's collision with the bridge?

Answering the second question first, it is clear that knowledge will not be imputed to owners of a vessel unless such knowledge is by one who can bind his principal. The owners of the vessel are generally far removed from the scene of the accident, and an ordinary sailor, for example, may have acquired knowledge of a defect in the vessel's equipment during the voyage, and it may further appear that the defect ultimately resulted in the damages complained of, yet his knowledge would not be imputed to the owners so as to make them liable for the entire loss, irrespective of the value of the vessel.

As stated in The Oneida, 2 Cir., 282 F. 238, 241, and again in The 84-H, 2 Cir., 296 F. 427, 431:

"the privity or knowledge must be actual and not merely constructive. It involves a personal participation of the owner in some fault or act of negligence causing or contributing to the injury suffered. There must be some fault or negligence on his part or in which he in some way participates."

Numerous cases are cited by appellants which hold that upon the facts disclosed in those cases the owners did not have such privity or knowledge as to bring them within the exception of the statute. In these cases a limitation of liability was decreed. The Admiral Fiske, 9 Cir., 41 F.2d 718; The North Star, D.C., 3 F.2d 1010; The Princess Sophia, 9 ...


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