Italia Societa Rer Azioni Di Navigazione v. Oregon Stevedoring Co.
Opinion of the Court
delivered the opinion of the Court.
This is an action by a shipowner, Italia Societa per Azioni di Navigazione (Italia), against a contracting stevedore company, Oregon Stevedoring Company (Oregon), to recover indemnity for breach of the stevedore’s implied warranty of workmanlike service. The issue presented is whether the warranty is breached where the
I.
The petitioner, Italia, is the owner of the vessel M. S. Antonio Pacinotti. The respondent, Oregon, agreed to render stevedoring services for Italia in all ports along the Columbia and Willamette Rivers. Under the contract between the companies Oregon was to have exclusive rights to and control over the loading and discharge of cargoes aboard Italia’s vessels
In Ryan v. Pan-Atlantic Corp., 350 U. S. 124, the landmark decision in this area, it was established that a stevedoring contractor who enters into a service agreement with a shipowner is liable to indemnify the owner for damages sustained as a result of the stevedore’s improper stowage of cargo. Although the agreement between the shipowner and stevedore was silent on the subject of warranties and standards of performance, the Court found that the essence of the stevedore’s contract is to perform “properly and safely.” “Competency and safety . . . are inescapable elements of the service undertaken.” This undertaking is the stevedore’s “warranty of workmanlike service that is comparable to a manufacturer’s warranty of the soundness of its manufactured product,” 350 U. S., at 133-134, a warranty generally deemed to cover defects not attributable to a manufac
The Court further distinguished in Ryan between contract and tort actions, stating that the shipowner’s suit for indemnification was not changed “from one for a breach of contract to one for a tort simply because recovery may turn upon the standard of the performance of petitioner’s stevedoring service,” 350 U. S., at 134, and pointedly declined to characterize the stevedore’s conduct as negligent, notwithstanding that discussion in the opinion below centered on concepts of active and passive negligence on the part of the shipowner and stevedore.
Subsequent decisions have made clear that the stevedore’s obligation to perform with reasonable safety extends not only to the stowage and handling of cargo
Oregon argues, however, that the imposition in Ryan of liability on the stevedore in warranty rather than tort was necessitated by the Court’s previous decision in Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U. S. 282, which held that maritime principles of contribution between joint tortfeasors prevailing in collision cases were not applicable in suits for contribution by a shipowner against stevedore companies. It further
“What has been said is not to suggest that the owner is obligated to furnish an accident-free ship. The duty is absolute, but it is a duty only to furnish a vessel and appurtenances reasonably fit for their intended use. The standard is not perfection, but reasonable fitness; not a ship that will weather every conceivable storm or withstand every imaginable peril of the sea, but a vessel reasonably suitable for her intended service.” Mitchell v. Trawler Racer, Inc., 362 U. S. 539, 550.
We do not believe a rope designed to withstand three to five times the pressure exerted on it when it gave way satisfies the standard of reasonable safety. And the District Court specifically found that the rope was unfit for the purpose for which it was intended and that the injury to Griffith was the natural consequence of its breakage.
Oregon, a specialist in stevedoring, was hired to load and unload the petitioner’s vessels and to supply the ordinary equipment necessary for these operations. The defective rope which created the condition of unseaworthiness on the vessel and rendered the shipowner liable to the stevedore’s employee was supplied by Oregon, and the stevedoring operations in the course of which the longshoreman was injured were in the hands of the employees of Oregon. Not only did the agreement between the shipowner place control of the operations on the stevedore company, but Oregon was also charged under the contract with the supervision of these operations. Although none of these factors affect the ship
True the defect here was latent and the stevedore free of negligent conduct in supplying the rope. But latent defects may be attributable to improper manufacture or fatigue due to long use and may be discoverable by subjecting the equipment to appropriate tests. Further the stevedore company which brings its gear on board knows the history of its prior use and is in a position to establish retirement schedules and periodic retests so as to discover defects and thereby insure safety of operations. See Booth S. S. Co. v. Meier & Oelhaf Co., supra. It is considerations such as these that underlie a manufacturer’s or seller’s obligation to supply products free of defects and a shipowner’s obligation to furnish a seaworthy vessel.
Where the shipowner is liable to the employees of the stevedore company as well as its employees for failing to supply a vessel and equipment free of defects, regardless of negligence, we do not think it unfair or unwise to require the stevedore to indemnify the shipowner for damages sustained as a result of injury-producing defective equipment supplied by a stevedore in furtherance of its contractual obligations. See Alaska S. S. Co. v. Petterson, 347 U. S. 396, 401 (dissenting opinion).
Both sides press upon us their interpretation of the law in regard to the scope of warranties in nonsales contracts, such as contracts of bailment and service agreements. But we deal here with a suit for indemnification based upon a maritime contract, governed by federal law, American Stevedores, Inc., v. Porello, supra, in an area where rather special rules governing the obligations and liability of shipowners prevail, rules that are designed to minimize the hazards encountered by seamen, to compensate seamen for the accidents that inevitably occur, and to minimize the likelihood of such accidents. By placing the burden ultimately on the company whose default caused the injury, Reed v. The Yaka, 373 U. S. 410, 414, we think our decision today is in furtherance of these objectives.
II.
The District Court declined to pass on the issue decided above since it found that the implied warranty of workmanlike performance was negated by the provision in
It is so ordered.'
The contract reads:
"It is mutually agreed between the parties hereto, that tbp Steve-doring Company will act as stevedores, and that they will with all possible dispatch, load and/or discharge all cargoes of vessels owned, chartered, controlled, or managed by the Steamship Company at all Columbia and Willamette River ports as directed. And it is agreed that the Steamship Company will grant to the said Stevedoring Company the exclusive rights of handling all such cargoes as before mentioned under the terms of this agreement . . . .”
Paragraph VIII of the agreement states:
“The Stevedoring Company will be responsible for damage to the ship and its equipment, and for damage to cargo or loss of cargo over-*317 side, and for injury to or death of any person caused by its negligence, provided, however, when such damage occurs to the ship or its equipment, or where such damage or loss occurs to cargo, the ship’s officers or other authorized representatives call the same to the attention of the Stevedoring Company at the time of occurrence. The Steamship Company shall be responsible for injury to or death of any person or for any damage to or loss of property arising through the negligence of the Steamship Company or any of its agents or employees, or by reason of the failure of ship’s gear and/or equipment.”
The shipowner is liable for unseaworthiness, regardless of negligence, whenever the ship or its gear is not reasonably fit for the purpose for which it was intended and this liability extends to longshoremen and others who work aboard the vessel, including those in the employ of contracting stevedore companies. Seas Shipping Co. v. Sieracki, 328 U. S. 85; Pope & Talbot v. Hawn, 346 U. S. 406; Mitchell v. Trawler Racer, 362 U. S. 539. If the owner engages others who supply the equipment necessary for stevedoring operations, he must still answer to the longshoreman if the gear proves to be un-seaworthy. Alaska S. S. Co. v. Petterson, 347 U. S. 396. This liability is strict and nondelegable. Mitchell v. Trawler Racer, supra; Mahnich v. Southern S. S. Co., 321 U. S. 96.
George v. Willman, 379 P. 2d 103 (Alaska); Hessler v. Hillwood Mfg. Co., 302 F. 2d 61 (C. A. 6th Cir.); Green v. American Tobacco Co., 154 So. 2d 169 (Fla.); Henningsen v. Bloomfield Motors, 32 N. J. 358, 161 A. 2d 69. See Frumer and Friedman, Products Liability, § 10.01, and cases cited therein; Uniform Sales Act, Uniform Laws Annotated (1950 ed.), §15 (1); Uniform Commercial Code, Uniform Laws Annotated (1962 ed.), §2-315. See generally Williston, Sales, §237 (Rev. ed. 1948 and Supp. 1963).
Palazzolo v. Pan-Atlantic S. S. Corp., 211 F. 2d 277 (C. A. 2d Cir.):
“Judgment on the action for indemnity over was awarded to Ryan. We think this error. The trial judge found Pan-Atlantic guilty of negligence in that its ‘cargo officer did not properly perform his admitted duty to supervise the safe and careful loading of the vessel.’ However, Ryan created the hazardous condition by its improper stowage of the pulp paper rolls at Georgetown. We think the improper stowage the primary and active cause of the accident. Under our holdings . . . indemnity over is recoverable where, as here, the employer’s negligence was the ‘sole’ ‘active’ or ‘primary’ cause of the accident.” Id., at 279.
If the stevedore is liable in warranty for supplying defective, injury-producing equipment, of course the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act, 44 Stat. 1424, as amended, 33 U. S. C. §§ 901-950, are no bar to recovery. This question was fully resolved in Ryan v. Pan-Atlantic Corp., supra, at 130: “The Act nowhere expressly excludes or limits a shipowner’s right, as a third person, to insure itself against such a liability either by a bond of indemnity, or the contractor’s own agreement to save the shipowner harmless.” See also Reed v. The Yaka, supra.
See Crawford v. Pope & Talbot, Inc., 206 F. 2d 784 (C. A. 3d Cir.); Rich v. United States, 177 F. 2d 688 (C. A. 2d Cir.); McFall v. Compagnie Maritime Belge, S. A., 304 N. Y. 314, 107 N. E. 2d 463. See generally Weinstock, The Employer’s Duty to Indemnify Shipowners For Damages Recovered By Harbor Workers, 103 U. of Pa. L. Rev. 321 (1954).
Cf. Calderola v. Cunard S. S. Co., 279 F. 2d 475 (C. A. 2d Cir.); Orlando v. Prudential S. S. Corp., 313 F. 2d 822 (C. A. 2d Cir.).
Seas Shipping Co. v. Sieracki, supra, at 100. Hugev v. Dampskisaktieselskabet Int’l, 170 F. Supp. 601, 609-611, aff’d sub norm. Metropolitan Stevedore Co. v. Dampskisaktieselskabet Int’l, 274 F. 2d 875 (C. A. 9th Cir.), cert. denied, 363 U. S. 803; Revel v. American Export Lines, 162 F. Supp. 279, 286-287, aff’d, 266 F. 2d 82 (C. A. 4th Cir.).
“The function of the doctrine of unseaworthiness and the corollary doctrine of indemnification is allocation of the losses caused by shipboard injuries to the enterprise, and within the several segments of the enterprise, to the institution or institutions most able to minimize the particular risk involved.” DeGioia v. United States Lines, 304 F. 2d 421, 426 (C. A. 2d Cir.). And see Ferrigno v. Ocean Transport Ltd., 309 F. 2d 445 (C. A. 2d Cir.).
Dissenting Opinion
with whom
Today’s decision is commanded neither by Ryan Steve-doring Co. v. Pan-Atlantic S. S. Corp., 350 U. S. 124, and its progeny, nor by the general law of warranty. In Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U. S. 282, and Pope & Talbot, Inc., v. Hawn, 346 U. S. 406, we held that the system of compensation which Congress established in the Longshoremen’s and Harbor Workers’ Compensation Act
Moreover, the Court here expands the general law of warranty in a way which I fear will cause us regret in future cases in other areas of the law as well as in admiralty. There is no basis in past decisions of this or any other court for the holding that one who undertakes to do a job for another and is not negligent in any respect nevertheless has an insurer’s absolute liability to indemnify for liability to injured workers which the party who hired the job done may incur.
Finally, the contract under which the parties dealt here provided that the stevedoring company was to be liable for personal injuries resulting from its negligence, while the shipowner was to be liable for injury caused by its own negligence “or by reason of the failure of ship’s gear and/or equipment.” This provision appears on its face to put the burden of liability for unseaworthiness, which was the basis of the worker’s recovery here, on the shipowner, leaving negligence as the only basis on which the stevedoring company could be held liable. The District Court so held. ' The contract is before us, and we are as competent to interpret it now, without remanding to the Court of Appeals, as we are to invoke “policy” reasons in order to expand Ryan and impose new financial burdens on stevedoring companies in plain violation of the policy Congress adopted in the Longshoremen’s and Harbor Workers’ Compensation Act.
For these and other reasons cogently expressed in Judge Hamlin’s opinion for the Court of Appeals, 310 F. 2d 481, I dissent.
44 Stat. 1424, as amended, 33 U. S. C. §§ 901-950.
Reed v. The Yaka, 373 U. S. 410, held only that a longshoreman could bring a suit for unseaworthiness against a stevedoring company which chartered a ship and was the longshoreman’s employer. In that case no issue as to an implied warranty of workmanlike service
Reference
- Full Case Name
- ITALIA SOCIETA Per AZIONI Di NAVIGAZIONE v. OREGON STEVEDORING CO., INC.
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- Published