GUZMAN v. PICHIRILO

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Argument of Harvey B. Nachman

Chief Justice Earl Warren: Number 358, Laureano Maysonet Guzman, Petitioner, versus Ramon Ruiz Pichirilo.

Mr. Nachman.

Mr. Harvey B. Nachman: Mr. Chief Justice, may it please the Court.

This case presents a question that is here for the first time that is whether a longshoreman who was injured on a conceitedly unseaworthy vessel whether he may have his rights against the ship owner and his security against the vessel vitiated by the facts that the owner of the vessel demised it to his stevedore employer.

May I say that this question although raised by the respondent in the District Court does not really arise in this case until the Circuit Court's opinion because the District Court found as a matter of fact that there was no demise.

And we contend that the Circuit Court of Appeals has violated the injunction of this Court in the McAllister case by reversing the District Court on evidence that was not clearly erroneous.

I think perhaps it'd be best to state the respondent's argument in the District Court.

The respondent's argument it was, the owner has no personal liability because he has demised his vessel to someone else.

And despite the injunctions of Sieracki and all the cases of this Court that followed Sieracki that an owner has a non-delegable duty to provide and maintain at all times a seaworthy vessels.

A demise makes the demisee pro hac vice the owner and therefore the owner's interest is cutoff.

Therefore he has no in personam liability.

And the demisee who happens to be covered by a system of working with compensation cannot be liable because he's been exonerated by workmen's compensation and therefore this longshoreman who was injured exactly the same way that Sieracki was on an unseaworthy vessel in navigation is just tough luck.

He doesn't have any right.

He can't collect against anyone.

Unknown Speaker: Is this a --

Chief Justice Earl Warren: Would you mind briefly stating the facts of the case --

Unknown Speaker: Yes.

Chief Justice Earl Warren: -- Mr. --

Mr. Harvey B. Nachman: Yes Your Honor.

The facts of the case were simply that this longshoreman was aboard this Dominican flag vessel in the Port of San Juan, Puerto Rico.He was working on deck when a shackle on the boom broke.

The boom fell and crushed his head and split like a pineapple, that's the case, just what happened.

No defense was ever raised that the vessel was anything but unseaworthy.

The only defense raised was that we're not liable because there was no in personam liability.

Justice William J. Brennan: Well now whether -- what -- what were the facts of the demise?

Mr. Harvey B. Nachman: Well, I'm coming to that Your Honor and it's right now, the District Court had the following evidence --

Justice Potter Stewart: And just before you do if you will.

Mr. Harvey B. Nachman: Yes sir.

Justice Potter Stewart: Mr. Justice Brennan's acquiesce is just to get back for a minute to this accident and the status of this man, the ship so the Court of Appeals held had been demised to this man's employer.

Who was on it -- he was stevedoring.

Mr. Harvey B. Nachman: That's right.

Justice Potter Stewart: His name was stevedore.

And this plaintiff, this petitioner whom you represent, was he a regular member of the crew or was he just on their temporarily as a --

Mr. Harvey B. Nachman: He was a longshoreman employed by the stevedore who came aboard just to unload the vessel.

He was a regular longshoreman in that Puerto Rican harbor.

He had no other official connection with the vessel as a crew member.

Justice Potter Stewart: He was a shore based employee.

Mr. Harvey B. Nachman: He is an American citizen, resident of San Juan, Puerto Rico.

He was not a Dominican as all the other members of the crew were employees of -- under a Dominican flag vessel.

Justice Potter Stewart: He was shore based, and he was on there to unload or to load the vessel.

Mr. Harvey B. Nachman: That's right.

Justice Potter Stewart: And he had no -- he is not -- have a Jones Act claim then?

Mr. Harvey B. Nachman: None at all under the decisions of this Court.

Justice Potter Stewart: No, no.

Mr. Harvey B. Nachman: He was not a --

Justice Potter Stewart: And the --

Mr. Harvey B. Nachman: -- member of the crew of the vessel.

Justice Potter Stewart: The members of the crew of the vessel, were they employees of this man's employer?

Mr. Harvey B. Nachman: Well, the --

Justice Potter Stewart: Or is that a matter of controversy

Mr. Harvey B. Nachman: That is just a matter of controversy.

The District Court said, "No, the employer did not insure them under the State Workmen's Compensation system as he was required to do under Puerto Rican law.

They were all citizens and the Domiciliaries of the Republic of the Dominican Republic."

The captain, the master whose deposition was taken testified that he was an employee of the respondent, not of the demisee.

He referred -- he never -- he said that the Indian worker was not his fellow employee and he referred to the stevedore employer as a completely third party as not his employer.

This comes to answer Mr. Justice Brennan's question.

And this was the evidence presented by the master.

The -- there was also as I stated before no coverage by the stevedore employer of the crew under the local compensation law which was required and which this Court refused to review last year.

And the operator was registered with Customs at being the registered owner in the Dominican Republic.

Justice William J. Brennan: Now the operator being who?

Mr. Harvey B. Nachman: The respondent in this case.

The stevedore employer was the only one who testified on behalf to the respondent.

And he testified that he was operating, managing and controlling the vessel.

That he had it under a sort of demise or he didn't do it that way, what happened was that the respondent's proctor made a series of leading questions which the trial court admonished to influence said, "I can give no credence at all to this testimony.

You are putting words into this man's mouth.

You are mentioning charter, charter, charter, so he finally says charter."

So they continued with this line of testimony at the conclusion of which after he had just finished saying, "I am the operator.

I am managing and I am controlling the vessel."

The District Court says in the record and as in page 17 of the record, "I don't believe that you were the operator or in control of the vessel."

Then the District Court in its opinion says that, "Since there was no written charge, since there was no tangible evidence or whatsoever except this testimony, connecting the stevedore employer to the vessel that the evidence is too meager as a matter to constitute a demise."

And in his findings fact, the trial Judge found that the respondent was the owner in possession and control of the vessel.

Justice William J. Brennan: So, where is that?

Mr. Harvey B. Nachman: That's in page 20 Your Honor in the record.

The -- all of these are within three pages at Record 17, 19 and 20.

Now, the Court of Appeals was aware of the McAllister case and they avoided it from by a bootstrap doctrine which they said as follows."

We believe that the District Court believed the testimony of the stevedore employer.

But we believed that he made an incorrect legal influence from this testimony and therefore we will not be bothered by McAllister at all, as to the facts.

We will say, assuming this testimony to be credible of the stevedore employer.

We say there was demise."

Now, I submit that even if the Court of Appeals has this power which we say they don't under the McAllister rule.

We say this is a completely new reading of a -- of the evidence in a trial de novo in an appellate court that this is an incorrect statement of the law.

Gilmore & Black say, that a vessel under complete operation and control where in the hands of the operator maybe constituted a demise.

But there is no case that I know of decided by this Court that says that a demise maybe created by parole.

There is a case of the First Circuit Court which says so but that's dicta and that's back in 1825.

And they said that in that case that a demise maybe created by parole.

But in that case, there was actual written evidence of the relationship between the parties.

The one case, that that case, that early Circuit Court of Appeals case said, that holds that a demise maybe created under American Admiralty Law by parole relies upon is a (Inaudible), which is a Massachusetts case decided prior to early 1800.

And in that case, a demise was constituted by parole but an in rem liability was placed against the vessel anyhow for a breach of a contract of freight.

But that's jumping ahead of us.

The definition of a demise was in this Court in Reed against the United States which it said we must look to what purposes will be effectuated by the relationship between the parties.

There was no parole agreement in that case.

But in all of the cases that have arisen as to whether or not a demise maybe constituted by parole or whether there must be some evidence to reduce an agreement to writing.

They're all cases between the purported demisor and the purported demisee.

These are questions with relations between two contracting parties.

These are not cases involving the rights of a third person as against the vessel.

The only cases that I can think of in all of Admiralty Law today or the last -- since the Reed case where demises actually exist by parole are the harbor craft in large ports of the United States like New York and Philadelphia wherein these cases there has always been proof of a Custom of the industry to constitute the overcoming hurdle of no parole.

Justice William J. Brennan: I just think here that the -- without a written -- a writing evidencing a demise that -- that could not be a conclusion that there has been one?

Mr. Harvey B. Nachman: I wouldn't go that far.

Justice William J. Brennan: Well, what's your point then?

Mr. Harvey B. Nachman: My point is that the evidence such as at is, is insufficient in law to constitute a demise under the decision in the Reed case which says we must look to what purposes maybe effectuated.

And if the relationship can be defined as anything else but a demise then it is not a demise.

And this relationship could be defined as the District Court did in -- in -- during the trial as perhaps a trust relationship for a man whom was his friend and could not leave the Dominican Republic, as perhaps an agency agreement, or perhaps as a collector for the owner.

Justice William J. Brennan: But you make no point to the fact that that was not in writing.

Mr. Harvey B. Nachman: That would not of itself be the major concern.

It certainly one of the factors I think to which an Admiralty Court must determine whether a true demise exist.

Justice William J. Brennan: Of course if you had a demise in writing you'd --

Mr. Harvey B. Nachman: There'll be no problem.

Justice William J. Brennan: There'd be no problem.

Mr. Harvey B. Nachman: All the other cases --

Justice William J. Brennan: When you don't have a writing, that you do have a problem.

Mr. Harvey B. Nachman: That's right.

And what kind of evidence would constitute a demise I say that the Circuit Court in this case has no basis for this holding under any of the decisions in American law.

Now, as affects third parties because this -- in answer to your question Mr. Justice Brennan there are other things to be considered if it were just not in writing I supposed that vis-à-vis the charter, the purported charterer and the demise, there would be evidence as to what kind of relationship, what they wanted to do with the vessel, etcetera.

But, can it be constituted in a case involving a third party?

In other words this libellant comes into court with a claim against the vessel and against the owner.

And the owner through the testimony who -- who doesn't appear but through the testimony of his stevedore employer collaterally sets up a demise that just doesn't exist anywhere in which there's no notice of anywhere.

Neither the -- the libellant nor could a supplier or anybody who had to service this vessel had found out about the demise because the first evidence that anybody ever heard of the demise was after a lawful suit brought.

Customs didn't know there was a demise.

The workers didn't know there was a demise.

Anybody who supplied services to this vessel did so in the name of the owner, the only name that was carried in the letter -- in the captain's cabin was the only name carried in Customs.

They were dealing at all times as far as they knew with the owner.

Justice Potter Stewart: Can you interrupt your argument long enough to tell me (Inaudible) the -- what that characteristics are of a demised charter?

Mr. Harvey B. Nachman: As I understand -- as I understand it Mr. Justice Stewart a demised charter is a charter where the possession and control are passed completely for a stated term on stipulated sets of agreement to someone else to operate for his profit and to pay a rental or surplus.

Justice Potter Stewart: How does that -- are different from a bareboat?

Mr. Harvey B. Nachman: I don't -- I haven't yet defined any difference in the books between a demised charter and a bareboat charter.

Justice Potter Stewart: Bareboat charter.

Mr. Harvey B. Nachman: I think they are the same.

It differs only from a voyage charter or a time charter which are completely different --

Justice Potter Stewart: Yes.

Mr. Harvey B. Nachman: -- signs of agreement.

Justice Potter Stewart: Yes.

Justice William O. Douglas: Is the only -- the only decision on your side of the case in your favor of the Learned Hand opinion (Inaudible)?

Mr. Harvey B. Nachman: Well Your Honor, I think that all of the cases are -- I might favor with the exception of the Vito -- Vitozi cases.

I know of nothing that stands up --

Justice William O. Douglas: You did mention in the Grillea case that this was a matter of first impression.

Mr. Harvey B. Nachman: In the Grillea case, we have exactly the same fact situation where the seconds -- where there was a demise, it was unquestioned.

The United States Government entered into a demised agreement with Moore-McCormack Lines.

They set out of a full charter with all the rights as between themselves and Grillea of the longshoreman sued the United States of America and the War Shipping Administration.

And after the question of whether or not it was -- as if it were an in rem suit under the suits in Admiralty case was decided.Learned Hand said that it doesn't make any difference whether they're stevedore employer, Moore-McCormack is also the demise charter because the United States, if it had been a private party would have been liable in rem anyhow.

And therefore this man has his remedy and has leaned under the Grillea -- under the Sieracki case and as between the rights of the United States and Moore-McCormack, there was in that case an indemnity agreement.

But there need not be because in the Barnstable which this Court decided many year ago was also a written demised charter where the demisee was operating the vessel and was in collision with another vessel.

There was never any question that the injured victim, the vessel that was -- was sunk or damaged as a result of this collision could collect in rem against the Barnstable.

The only question that this Court decided as who had ultimate liability, the demisor or the demisee as between themselves?

Those are the only two people that were before this Court in the Barnstable.

This Court has many times held that an owner out of possession and control maybe liable.

The only case Mr. Justice Douglas that one doesn't is the South -- the District Court case from the Southern District of New York, the unreported case of Vitozi against S.S. Platano upon which the respondent and the Circuit Court relied.

All other cases have held as we had -- as we are contending for.

There are, I might point out, many situations where a shipowner may have someone else operate a vessel for on behalf or with him for various purposes.

A Circuit Court recently decided the Mission San Francisco cases which involved the United States MSTS contracts with masters and tankers where they would jointly held liable to anyone involved.

Then there've been cases where the identity of the employer was so confused on the part of the employer as -- so that you could not differentiate whether A, B or C was the actual employer of a particular seaman.

All were held jointly liable.

So that, we feel that on this basis of that -- there was a demise even assuming that the testimony of a stevedore employer was credible that the Circuit Court erred and the case must be reversed.

The next question that arises is whether assuming a demise, there was in personam liability on the part of the shipowner.

Now, here this is a conflict between the First and the Second Circuits too.

The First Circuit had the Vitozi case prior to the Southern District of New York had it in the rem action.

That was Vitozi against Balboa Steamship Company.

And the First Circuit decided that since the owner had demised the vessel, he was the -- the demisee was pro hac vice the owner and there was no in personam liability.

Two years later, the same fact situation came up in New York in Cannella against Lykes Brothers Steamship Company.

And again, Mr. -- Judge Hand, for the Second Circuit said, "No, the shipowner is liable because there is a non-delegable duty upon the shipowner at all time."

And in this case, in its opinion, in the case here before this Court, the First Circuit admits it may have been wrong, but only as to an unseaworthy conditions that preceded the demise not one that supervened the demise.

Mr. -- in the Cannella case, Judge Hand says that he saw no difference even though in that case was unquestionably preceding the demise.

But again, there's this conflict where -- which where the First Circuit stand and in some boats again on the Vitozi case.

I would say that there is no reason if this Court is going to continue the humanitarian policy of Sieracki to say that there is no in personam liability on the part of the shipowner because he has demised the vessel.

Justice Potter Stewart: Do you think there'd be in personam liability on the part of the demisee had he not been covered by this Compensation Act?

Mr. Harvey B. Nachman: As between him and the shipowner, sir an as between him and a third party if he had --

Justice Potter Stewart: That's between him and the injured plaintiff.

Mr. Harvey B. Nachman: Perhaps that he would be jointly liable.

Sir, he could -- could've been sued.

This way he couldn't have been sued.

Yes, I do think so.

Justice Potter Stewart: Certainly as --

Mr. Harvey B. Nachman: They concede as much.

They say he would've -- he --

Justice Potter Stewart: And they say --

Mr. Harvey B. Nachman: -- was the one at fault --

Justice Potter Stewart: They say --

Mr. Harvey B. Nachman: -- but --

Justice Potter Stewart: -- it was against him.

Mr. Harvey B. Nachman: -- only his exonerated.

Justice Potter Stewart: Yes, that's right.

Mr. Harvey B. Nachman: But this is no different than a vicarious liability statute.

The State of New York for example says every owner of a motor vehicle is liable for a damaged to a third party resulting from a negligent operating -- operation of that vehicle no matter who operates it.

And they have a compulsory insurance law in the State of New York obligating the owners to ensure their vehicle.

So that a car rental agency in New York --

Justice Potter Stewart: Yes.

Mr. Harvey B. Nachman: -- can rent its car to a user and have at -- and be on the same position as a demisor of a vessel and yet they're held liable.

And New York has never said that this is such a humanitarian policy as Mr. Justice Frankfurter said yesterday in the decision on the -- on the Utah statute, that this is an attempt by states and by the national government to cope with this terrible problem of damage and injury to individuals and we have here an industry were they're being clabbered every day of the week.

Now, these longshoremen are in the most hazardous industry in the United States.

Justice Potter Stewart: They have a Compensation Act specifically covering them?

Mr. Harvey B. Nachman: No, not -- not --

Justice Potter Stewart: (Inaudible)

Mr. Harvey B. Nachman: Not in Puerto Rico.

The federal -- it has been held that the federal Longshoremen Harbor Worker's Compensation Act does not applied to Puerto Rico.

But the Local Compensation Act which includes all workers in Puerto Rico has been held to have been delegated by Congress to the Puerto Rican legislature and this covers them as it covers all of the workers.

Justice Potter Stewart: All other employees in Puerto Rico.

Mr. Harvey B. Nachman: Yes.

Justice Potter Stewart: I see.

Unknown Speaker: I guess that's covered.

Justice Potter Stewart: Yes, that's covered, they're not special.

Mr. Harvey B. Nachman: But is -- as between the lessor or the demisor of the charter and the negligent party, the demisor always has his right over whether it be by indemnity, contract or indemnity-at-law or as they do it the common law states by passive acts and tort fees so that nobody is being punished.

Its just where does the risk fall on the innocent victim or the man whose property is in use.

Chief Justice Earl Warren: We'll recess now Mr. --

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Argument of Harvey B. Nachman

Mr. Harvey B. Nachman: -- the Court.

Before the luncheon recess we covered two grounds why we felt that the Circuit Court opinion should be reversed.

One that it violates their decision -- violated the McAllister rule and secondly that as a matter of law that no inference could be drawn here that the evidence constituted a demise.

I was discussing the question of in personam liability of the shipowner.

Now, at the time of the recess and why -- I thought that the decision's clearly stated that the in personam liability of the shipowner was a continuing obligation.

This has been the rule in Sieracki and every case -- well, even before Sieracki-Mahnich and in every case decided since that time.

And this question of personal fault of the shipowner has never been brought to the floor except recently, the First Circuit did it again in the Mitchell case a few years ago which this Court reversed and they are doing it here again.

But I submit that the personal liability of the shipowner here is no different than it was to the shipowner in the Pedersen case where the stevedore employer brings aboard a block that's defective.

Now for all practical purposes the shipowner has surrendered control to the stevedore to handle the loading and unloading and yet --

Unknown Speaker: He only leased that portion?

Mr. Harvey B. Nachman: Leased that portion of the vessel.

Unknown Speaker: Alright.

Mr. Harvey B. Nachman: And he has no personal fault and yet he was held liable in personam.

In the Crumady case, the shipowner provided what this Court said was inherently seaworthy equipment but which became unseaworthy through the negligent operation of the longshoreman.

He had no notice and both the ship and the shipowner were held responsible in rem and in personam.

In the Mitchell case, although it involved seaman, the shipowner had no notice or could not have prevented the condition and he was held personally responsible.

Or in the Boudin case where this Court held that a shipowner could be responsible for the unseaworthiness of the crewmembers.

And I think that we can accept as a fact of life that the shipowner has no control over the selection of these crew members.

These are selected in union hiring halls.

He must take who he gets and yet he's held personally liable for their actions.

And in the case of a demise it's no different from these other cases because a shipowner has the same continuing interest in the vessel and in its operation.

If he charters the vessel to someone else, during the period of the charter the shipowner is still collecting a rental.

He's making money.

He's still entitled to -- to deduct the depreciation which the operator doesn't get the credit for.

He's also entitled to a return of the ship which the First Circuit says they don't think has any bearing whatsoever whereas all the other of these cases that have decided this question think it's quite important.

But under a true demise, a one where there's a charter party is also entitled to periodic inspections.

He's entitled to survey, maintenance, insurance and indemnity.

All these phases of a charter party are either assumed or taken for granted by the First Circuit that they existed in this case.

And if they did, I don't understand why he didn't have personal liability.

And certainly, I can't understand why the vessel is not liable in rem.

This Court has held -- this comes to the -- to the other holding of the case that I -- was the respondent's argument from the outset, no in personam liability on the shipowner, no in personam liability on the part of the demisee therefore no in rem liability even though the man had a maritime lien created at the moment that he was injured as a result of unseaworthy equipment.

This Court has held in many situations that in rem liability does not depend upon in personam liability.

It said so in the piracy cases, said so in the capsizing cases, in the compulsory harbor pilot cases and it said so in the charter parties which involved collisions like the Barnstable.

The respondent claims that all these cases were based upon the doctrine that the ship is an independent personality.

And this Court shouldn't follow this fiction any longer because now we're in the 20th Century and we should do away with fictions upon which the law is based.

They cite Mr. Justice Black's opinion in the Consumer Credit case (Inaudible) 315 is saying that fictions, once useful, may no longer apply.

I submit that no case has said that they are going to abrogate fiction and you must, if you want to discard the fiction.

You don't have to base in rem liability on the fact that the ship is an individual entity and that it can commit wrongs.

What is involved, I think, is a policy question.

The policy of Sieracki is -- and the whole doctrine of unseaworthiness is clearly set forth.

I read from page 124 of this Court's opinion, “These hazards of marine service together with their helplessness to ward off such perils and the harshness enforcing them to shoulder alone, the resulting personal disability and loss have been thought to justify and to require putting their burden insofar as it is measurable in money upon the owner regardless of fault.

Those risks are avoidable by the owner to the extent that they may result from negligence.

And beyond this, he is in a position, as the worker is not, to distribute the loss in the shipping community which receives the service and should bear it's cost.”

And I suggest and there's nothing creative about this, Gilmore & Black suggested put the credit where it belong, that all of the cases that this Court has decided where in rem liability has been imposed in the past where there has been no in personam liability has been odd because of these same policy considerations.

For example in the China, it -- when the ship -- the ship was held liable in rem for the negligence of the compulsory harbor pilot, this Court could have said just as well as -- because the ship is an individual entity, it could have said the shipowner is in a position to ensure against these loss and distribute.

So too in the collision cases, the Court could have said the shipowner is in a position to collect from the demisee on the basis of either an expressed or an implied indemnity and so too in the longshoremen's cases were the stevedore employer.

The shipowner is able to collect over as against the responsible party who committed the loss that the burden should not be placed upon the innocent victim who is injured as a result of an unseaworthy condition to go after somebody who he -- whose limit -- whose liability may be limited only as to him or who maybe impecunious.

The shipowner holds himself out to the world as operating this vessel.

And this Court has held that a maritime lien arises all over the world when people perform services for the ship.

And these maritime liens are secret, nonconsensual liens.

The respondent in this case would say to us, "Oh yes, somebody who provided diddles for the crew might be able to collect the li -- a maritime lien against the vessel because the demisee might be liable in personam.

But in this case, the demisee's in personam liability is limited and therefore the injured worker can't collect against the vessel.

And I want to emphasize at this moment that in this case, there is nothing that has involved the cutting away of the humanitarian doctrine of Sieracki over the past years.

No question in this case of whether or not the vessel was in navigation.

There's no question in this case whether or not the injured worker is within the status of workers to be prodec -- protected by the doctrine of unseaworthiness.

The respondent claims that there are two cases which emphasized -- two recent cases which emphasized that this personality of the ship preclude the longshoremen from recovering.

And he cites Noel against Isbrandtsen which is a Fourth Circuit case and Pedersen against The Bulklube which is a Second Circuit case.

In both those cases, the questions were not the questions that arise here.

In both cases, the sh -- well, in neither case was the ship in navigation.

And in neither case was the worker entitled to a seaworthy vessel.

Here we have a right with a correlative duty which was breached in this case.

And the respondent claims that this can be breached with impunity.

“And the security which this Court has said arose immediately upon the breach can be vitiated”, says the respondent because the stevedore employer has a limitation of liability vis-à-vis the longshoreman.

The Workmen's Compensation Act of Puerto Rico was designed just has -- just as was the Federal Longshoremen and Harbor Workers' Compensation Act which Mr. Justice Stewart referred to.

Both of these Acts were designed to increase the rights of the worker rather than to limit them.

Both of these Acts provide for third party actions against responsible parties.

And although there has been no case in Puerto Rico saying that a shipowner who owns a vessel, the vessel is not a third party as there has been in the other states which this -- which this Court has refused to grant cert.

There's no case anywhere which except the Vitozi against Platano which says that the demisee is for all purposes the owner.

And there is no other case that I know of besides the First Circuit cases in this case and in Vitozi which say that a non-delegable duty of the shipowner can be erased.

He can contract it away.

This Court said it is specifically impossible of contracting away.

And the First Circuit says, "In all conditions except the demise."

Now, if a maritime lien is entirely independent of possession is non-consensual.

And it's commonly said not to be extinguished by transfer to a bona fide purchaser without notice of its existence and it -- if it may arrive -- arise even though the owner of the vessel in which it subsist is not personally liable I submit that it cannot be expunged in the case at bar.

In essence, there is no difference between the argument of the respondent in this case and the fears expressed by Mr. Justice Black in his dissent in the Ryan case.

That time when this Court held that the shipowner could collect indemnity from the stevedore employer that created the unseaworthy condition and which has later been held that -- that such an indemnity can be created without a direct contractual relationship and without any contract.

That Mr. Justice Black's fear as to what would happen have come home to roost here that the shipowner has contracted away his liability to someone who is exonerated from liability, who has no desire to prosecute against the shipowner on behalf of the injured worker because he ultimately maybe liable to the shipowner.

And therefore the ship -- the individual injured workers' rights had been completely cut out from the whole Sieracki policy.

This is a worker who is in exactly the same position and who was injured exactly the same way as Sieracki was.

The position of the petitioner here on appeal is that although this Court never need reach the in rem situation presented in order to reverse that this case is reversible solely upon the ground that it violates the precepts of McAllister.

That because the conflicts exist between the Second and Third Circuits and the First Circuit as to the rights of a longshoreman on a vessel demised to the stevedore employer that this question must be resolved because under the same operative facts that exists here, only better, in other words, there was a true demise charter.

Workers have been allowed to recover in both the Third Circuit and in the Second Circuit where all of the arguments placed in the opinion of the First Circuit were placed before those courts and rejected upon the authority of the cases of this Court.

And I submit that the decision of the First Circuit is clearly erroneous and should be reversed.

Can I save the remainder of my time?

Chief Justice Earl Warren: You may.

Mr. Harvey B. Nachman: Thank you, sir.

Chief Justice Earl Warren: Mr. Edgerton.

Argument of Seymour P. Edgerton

Mr. Seymour P. Edgerton: Mr. Chief Justice, may it please the Court.

I think that I should spend a few minutes at the beginning of my argument here on the question of the demise charter.

The District Judge after having heard the testimony said in his opinion at page 19 of the record here, and I'm quoting, "I can find no lawful basis for holding that the vessel was under a demise charter to Bordas & Company.

The Court of Appeals treated that language and we think rightly treated it as in effect a ruling that there was insufficient evidence on which to make the finding which would be equivalent to a directed verdict against the finding in a jury tried case.

Now, if that -- if we are correct in that interpretation of what the District Judge did there is we think no conflict with McAllister here where he is overturn -- where the Court of Appeals is overturning the District Judge on a ruling of law on insufficiency of the evidence.

Now, thereafter having made the ruling -- having made the correction of the ruling of the District Judge, the Court of Appeals proceeded to make a finding which was that a demise charter existed.

And it did that on the testimony -- on the only testimony which was offered in the District Court in connection with the demise situation which was that of Manuel Bordas, a partner, I think he calls himself a director-partner of Bordas & Company, the charter.

And the testimony there was uncontradicted.

He -- the testimony was that Bordas & Company had been operating this vessel for about five years that it paid the owner, a citizen of the Dominican Republic $200 a month for the use of the vessel and that it paid all of the expenses of the vessel.

And Mr. Bordas enumerated them at -- to some extent or rather extensively his testimony appears at pages 13, 14 -- 13, 15 and 16 of the record.

What he says is, “I pay the crew.

The master makes up the payroll and I pay every 15 days.

He pays the seamen.

We also give him the money for the rations or the feeding, all the operating expenses of the vessel.”

On page 13, he says, “I mean paying the payrolls, the captain's salary, all the payrolls, the food of the crew, the fuel, the maintenance or repair, the dry docking, the insurance and the port charges and all the expenses that go with the operation of a vessel.”

My Brother referred to counsels asking leading questions in the District Court and the record indicates plainly that the District Judge tried counsel for leaving the witness.

The District Judge however did not strike the testimony.

He simply told counsel that he -- that counsel was testifying in effect as to a conclusion.

But he then left Bordas -- this witness testify as to what the type of charter was.

And we submit that on -- oh, I should add this, the only evidence which could possibly be said to be contrary to this testimony was one word in the testimony of the Master Captain Laurea who said that he was employed by the respondent Pichirilo.

Now, Bordas' testimony was that Laurea -- Captain Laurea was appointed by the respondent but that he is under my orders and under my payroll.

And I think perhaps this brings me to a question that Mr. Justice Stewart, I think asked of my Brother, which was as to the nature of a demise charter.

And I think it can be best put in this way that where the owner of the vessel surrenders the possession, navigation and control of the entire vessel to the charterer, the charter is a demise.

Now, it need not be a bareboat.

The typical demise is that of a bareboat.

There's nothing aboard.

They just give them the boat and say, "You put on the fuel, the stores.

You get the crew.

You get everything else."

But this Court held many years ago and or a good many years ago in United States against Shea that the demise situation arose even though the master and crew were both furnished by the owner.

But where the complete control of the demise vessels was in the demisee which in that instance was the United States -- I'm trying to find it here, yes, the dem -- dem -- the demise was to the United States and the vessels were operated in New York Harbor.

The representative was the United States.

I think someone in the War Department told them what to do, where to go, everything, controlled the master and controlled others.

And the text writers all agree, Robinson and his hornbook on admiralty and Gilmore & Black all agree that while a demise is usually of a bareboat, it need not be so.

And where here, the only evidence is that the -- that Bordas & Company controlled the entire vessel, paid all of the expenses and that although the master was appointed by the respondent, he was under the orders and under the payroll of the charterer, we think lead to only one conclusion in that direction which was that the vessel was under demise to Bordas & Company.

Now, of course, that's funny.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: No, sir.

He -- the only testimony of the master in connection with anything except the accident -- that the facts of the accident itself was -- he was asked, page 15 -- I am -- I beg your pardon, I'm looking at the wrong place.

He wasn't asked of any rate about anything except whose employee he was and he said that he was employed by the respondent.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: He was -- he was the respondent's witness, was he not?

My Brother corrects me.

He was the libellant's witness.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: Not on that point at all or in -- no -- none whatever.

Of course the -- this demise situation lies at the very threshold of the case because if there wasn't any demise, the case is over and should be reversed.

Justice William J. Brennan: Wasn't it a demise, you lose --

Mr. Seymour P. Edgerton: That's right.

Justice William J. Brennan: -- wouldn't you?

Mr. Seymour P. Edgerton: Now, we -- our next point is that a general owner who has demised this vessel is not liable in personam for an unseaworthy condition arising after the demise takes effect.

We are not quarrelling in any way with Sieracki against Sea Shipping Company or the Alaska Steamship Company against Petterson case.

This Court has never held and that so far as I am aware has never had presented to it for holding who the owner is?

Who has the obligation of providing a seaworthy vessel?

And when I say who the owner is, I mean whether it is the -- whether in a demise situation, it is the general owner who has parted with the possession and control of this vessel which was then seaworthy and the sea worthiness -- unseaworthiness later arises or whether it is the demisee who has taken complete possession and control of the vessel.

And we submit that by accepted principles of maritime law accepted for many years by this Court and other courts in England and elsewhere.

The demisee assumes and is -- and has placed upon him, as a matter of law, the personal responsibilities of ownership which in the absence of a demise would be upon the crew or general owner.

And it is our position that where as here and it is uncontested here that the unseaworthiness arose long after the demise and shortly before this man was injured.

Our position here is that the charterer, Bordas & Company who happened to be the employer of the injured man had the personal responsibility for unseaworthiness.

And I think perhaps right here, I should pause for a moment and speak briefly about this Court's decision in Crumady against the Joachim Hendrick Fisser which was decided in 1959.

That case has been referred to by various courts including this one on one occasion at least as a case which involved a demise charter.

And briefly, the situation was, and my Brother referred to this case in his argument briefly the situation was that the winch on the vessel was set for a -- the automatic pedal of the winch was sat first for -- for a six-ton working load and the hatch runners and wires were certified for a three-ton safe working load and the winch continued to operate and the gear parted.

Now, Crumady as I say has been cited and spoken of as though it involved the demise.

And we've searched the record in this Court and the briefs of counsel and have been unable to discover anything in any of them which have indicated that there was any demise.

This Court in deciding the case said that the cut off, automatic cut off of the winch had been set by servants of the vessel who were crew members and if that were so, servants of the owner and if that were so, then there was no demise because the crew would have been servants of the demisee and not of the owner.

We have referred in our brief to the pleadings in the Crumady case as that they appear in the record here and also to the cross-petition for certiorari there where the petitioner says that it was a time charter and we're convinced that it was.

I believed that was an inadvertence that this Court said in Waterman against Dugan & McNamara in 1960 that the person who employed the stevedore in the Crumady case was operating the ship under a charter.

It's misleading if -- if that was a demise charter then again we've had it here because that's a decision that takes care of this situation either in personam or in rem and perhaps both but I am convinced that that was not so.

And that that statement in the Waterman case was inadvertence particularly since this Court had said in West against the United States in 1959 that in Crumady the vessel was in control of the owner and held that he was liable for unseaworthiness and negligence.

I -- sorry to take so much time with that but I think it should be.

Well, I -- now my Brother I think has said that there is a dispute between the First and the Second Circuit as to the liability in personam.

Justice John M. Harlan: (Inaudible)

Mr. Seymour P. Edgerton: I beg you pardon?

Justice John M. Harlan: (Inaudible)

Mr. Seymour P. Edgerton: Sir --

Justice John M. Harlan: (Inaudible)

Mr. Seymour P. Edgerton: Well, my argument as to McAllister, Your Honor, is that the Court of Appeals did not overturn a finding of fact of the District Judge on the ground that the finding was clearly erroneous.

Justice John M. Harlan: (Inaudible)

Mr. Seymour P. Edgerton: I don't believe it is, Your Honor.

The Court of Appeals thought and it seems to me correctly that the judge had ruled that there was insufficient evidence on which he could make the other finding, in other words as -- as though it were a directed verdict in a jury case.

Now, he -- the District Judge in his opinion, far from indicating that there was lack of credibility involved in what the District Judge had done.

He said in his opinion which appears at pa -- on page 19 of the record in discussing this demise situation, he says than no written charter had been produced.

And then he says Mr. Luis Manuel Bordas, director-partner of Bordas & Company, the punitive demisee admitted there was no charter and that his company's relation with the vessel was something like a charter but not a charter.

Well, there is no such testimony in the record.

The district -- the testimony which the trial judge was referring to there I believe was the testimony of this witness that this was not a regular charter but it was like a charter and that appears on page 15 of the re -- it is a kind of charter because it does not comply with the regular provisions of the charter.

He had just been telling the Court what the provisions of the charter were.

And we submit that he was clearly distinguishing between a time or voyage charter on the one hand and a demise on the other.

Perhaps, I got away from your question Mr. Justice Harlan.

I --

Justice John M. Harlan: (Inaudible)

Mr. Seymour P. Edgerton: Yes sir.

And that's the only possible factual finding was the one which the Court of Appeals then made.

And there was no point in sending it back with the direction for that finding to be made below.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: Well, only Your Honor because the evidence was uncontradicted and the Court of Appeals felt could support only one possible conclusion.

That --

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Well --

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: I think that would've presented a different question Your Honor and that -- that that would have presented the McAllister situation.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Well, if the District Judge -- I'm not sure that I've got this quite straight Your Honor, but if the District Judge found on the basis of credibility or on the basis of inadequacy of the Bordas' testimony --

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: -- pressing this Bordas' testimony or some other reason that there was no demise, I think that would have to stand and the Court of Appeals could not have changed them.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Yes, sir.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Well, they -- they thought it was very plain --

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: -- and if they're wrong about that then they've made a mistake.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: I don't think they can if it's sustainably open Your Honor.

And if that's the -- the proper reading of the evidence then it must go back.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: I think you're correct.

That would have to be done.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Well, I think it mean -- I think it means that you must decide -- yes, I -- I believe it comes down to that.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: I think it does.

It gets down to that.

Justice William J. Brennan: The thing I didn't quite understand in -- you told us that in the Waterman case, there was a reference to the fact that the ship was operating under a charter and that was a reference to the Fisser case, is that it?

Mr. Seymour P. Edgerton: Yes sir.

I --

Justice William J. Brennan: I just have it before me.

I want to be sure I understood what you were telling --

Mr. Seymour P. Edgerton: Yes.

In the Waterman case, this Court referred to the Fisser case.

Justice William J. Brennan: Right.

Mr. Seymour P. Edgerton: And in that reference said that in the Fisser case, the stevedore was employed --

Justice William J. Brennan: Not by the shipowner but by the party operating the --

Mr. Seymour P. Edgerton: But --

Justice William J. Brennan: -- ship under a charter?

Mr. Seymour P. Edgerton: That's correct.

Justice William J. Brennan: That's the language you were talking about?

Mr. Seymour P. Edgerton: Yes sir.

Justice William J. Brennan: And --

Mr. Seymour P. Edgerton: That's --

Justice William J. Brennan: -- you suggested that that might be inaccurate?

Mr. Seymour P. Edgerton: That's right.

I thought it might be inadvertence particularly in view of what this Court had said in West.

That in -- in speaking of Crumady and West, the year before it said that in Crumady the vessel was in the control of the owner.

Justice William J. Brennan: Now the Fisser case was an action in rem, was it?

Mr. Seymour P. Edgerton: It was, sir.

It was an action in rem.

And that is why I say that if I am mistaken about the nature of the charter that existed in the Fisser case that it is authority against my position here.

I was referring to my Brother's statement that the First and Second Circuits were in disagreement as to the liability of the general owner for unseaworthiness arising after the demise.

And I think that is incorrect.

And the case is now stand in this way that in the Vitozi against Balboa Steamship Company in 1949, the First Circuit held that the demisor was not responsible for unseaworthiness whenever it happened either before or after the demise.

In Cannella against Lykes Brothers, the Court of Appeals for the Second Circuit said they agreed that the general owner wouldn't be liable for unseaworthiness arising after the demise but that he was liable for unseaworthiness existing at the time of or before the demise.

In the instant case, the First Circuit agree -- well, the First Circuit says that perhaps it went too far in Vitozi in saying that the demisor would not be liable for unseaworthiness existing at the time of the demise but says that as to unseaworthiness existing after the demise, the demisor is not liable.

And Grillea against the United States that much discussed case in this area, in the first Grillea decision and its important to note that there were two.

And the first one by Judge Learned Hand in 229 F.2d, he ruled and it was the result of that decision that the demisor was not liable in personam for unseaworthiness which arose after the demise so that in Grillea and in the instant case, the First and Second Circuits are in agreement.

Now, the difficulty with Grillea came later because there was a rehearing and the question of the in rem phase then came before the Court of Appeals for the Second Circuit.

But as far as the in personam aspects are concerned, we think that the general owner who has demised his vessel is not personally responsible for this supervening unseaworthiness.

And that we think is consistent with long standing thinking -- legal thinking and general admiralty doctrine of the division of responsibilities as between an owner who has demised his vessel and a charterer who has taken the entire possession, control and navigation under the demise.

And it -- it strikes me as rather interesting perhaps that if -- seems to me that if the general owner remains liable for unseaworthiness supervening after he has demised a seaworthy vessel, he maybe in this situation and if -- if a seaman sues his employer the -- the demisee of the ship, his employer, under the Jones Act and he has a jury trial and he alleges unseaworthiness and negligence and he loses, he could still proceed under the general maritime law against the general owner for the same unseaworthiness.

And I don't see how there could be any res judicata.

The parties are different.

The -- there's no identity of interests.

I speculated as to whether or not that might not result from a view that the general owner continued to retain his obligation for later unseaworthiness.

The same thing might happen to -- as respect to cargo where there was a bill of lading exception to which the general owner was not a party.

Now, I don't believe there's any question here.

In fact, I'm sure that none has been raised but that Bordas & Company, the demisee of the vessel and the employer of the injured longshoreman was fully covered by the Workmen's Accident Compensation Act of Puerto Rico.

The demisee had qualified under the Act.

The -- he'd -- he -- he had done whatever was necessary to ensure himself with what is called the “state insurance fund” which is the same thing as the Compensation Board of Puerto Rico.

And the evidence has perfectly claimed that the libellant had received his final award and had got everything which the law of Puerto Rico, the Workmen's Com -- Compensation Act provided to him.

Now, the approach of this situation, it seems to me, lies in the situation which develops -- where if the general owner is not liable in personam for supervening unseaworthiness and the liability of the demisee for an injury resulting for unseaworthiness has been validly limited by a valid Compensation Act whether under those circumstances, the vessel can nevertheless be liable in rem.

And contrary to what was said in the argument of the -- for the petitioner or I -- I shouldn't say contrary but let me say, I know of no decision of this Court placing civil liability on a vessel in rem where no one was liable in personam.

And the case that goes the farthest in that direction in my knowledge is the China, the compulsory pilotage case and I'll come to that in a moment or two.

But, if there is to be liability on the ship in rem where the general owner is not liable to law and the demisee's liability has been statutorily and completely li -- and as so limited completely satisfied, then it seems to me that you've got to take the position that you are going to go all the way with this theory of personification which is so much in the literature of the admiralty but which -- when it comes down to the application to actual cases has been discarded by this Court frequently and it seems to me it has been discarded when the following of the admittedly fictive nature of the personification theory would lead to results which appear to be inequitable, unjust and to create illogical and inconsistent situations.

The -- I think -- I think I might properly say here that Courts of Appeals for three Circuits starting with the Fifth Circuit in 1933 in Samuels against Munson Line and going to the Third Circuit in 1952 in Smith against The Mormacteal and to the Second Circuit in 1958 in Bennett against The Mormacteal, those cases are all on page 17 of our brief.

In those cases, the Courts of Appeals held that where the owner was doing his own stevedoring, where the owner employed his own longshoremen and where the owner was consequently relieved to personal liability by the terms of the Longshoremen's and Harbor Workers' Compensation Act, the ship was not to be subjected to in rem liability and that was done on two primary basis that it wasn't the third person under the Act but more properly that you are trying to do by indirection much you couldn't do directly that taking the man's property to satisfy -- taking the man's property by way of a maritime lien to give it to the longshoreman, you are giving the longshoreman from his employer what the Longshoreman's Act said that you should not do.

Well, Your Honor that raises a rather difficult area to say the least.

In his second Grillea, he said that as a matter of first impression he saw no reason why you shouldn't take a man's property to satisfy somebody else even though nobody was personally at fault.

But then he went on and he discussed an indemnity agreement which existed in that case and perhaps I better go into the facts just a little bit of -- in Grillea, the United States had chartered the vessel to an operator which did its own stevedoring.

The operator employed Grillea.

Grillea was injured through an unseaworthy condition which occurred or which arose a very, very short time before he was hurt.

It was a matter of hatch boards being placed back over the hatch in a wobbly way or the wrong side up so that when Grillea stepped on them a few minutes later, down he went and he was injured.

And as I said in the first Grillea case, the Court of Appeals held that the United States was not liable in personam for that unseaworthiness.

And the second Grillea arose on rehearing.

The Court of Appeals didn't reach any in rem question in the first case because it felt that under the suits in Admiralty Act there had been no adequate election to proceed as though on -- to proceed on principles of libels in rem which I think is the wording of the statute.

Then on rehearing, the court felt that there has been a sufficient election in the libel because of their having alleged that the vessel now was or during the pendency of process will be within the district and various other things.

So they said there was an adequate election to proceed in personam and to proceed as though in rem and that was done.

Now in the charter between the United States and the demisee whose name escaped me for the moment, one of the shipping companies.

There was a provision that the demisee would indemnify the United States for any liens arising during the demise.

And somehow or rather, Judge Hand seemed to feel that because there was an agreement to indemnify the United States against liens that that was a sufficient phases for saying that a lien existed.

I don't follow it.

Other courts have had difficulty with it.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: Well, the Second Circuit in Bennett against The Mormacteal which was decided by Judge Abruzzo, I think in the district referring per curiam, he said that he didn't know what it meant and that in the Bennett case, they didn't feel that the decision, I may not be putting this quite correctly, but they didn't feel Brearley helped the many in that situation and in this case of Pedersen against The Bulklube also decided fairly recently in the Second Circuit.

They declined to find in rem liability on the vessel for the negligence of a shipyard which was completely in control of the vessel but which was protected against its employee by the Compensation Act.

It is my feeling and I think probably so that the Second Circuit has backed away from Grillea in those two decisions.

And there's a third one which I did not cite in my brief but which is in a footnote to petitioner's brief which is Latus against -- somebody -- Latus against the United States.

That is also an opinion by Judge Learned Hand in 1960.

There of course, the vessel was out of navigation.

It was -- so the no lien arose but he referred to the Grillea case and he said of Grillea that -- that a longshoreman has a lien against the vessel for unseaworthiness which no one denies.

And I think no one denies it whether there is no complica -- complication of an owner who has let a seaworthy vessel and a demisee who is protected by the Compensation Act and under whose -- each is the -- unseaworthiness arises.

But we don't -- we don't feel that there's much of anything left to Grillea.

And I'm not sure that there really was anything very much in this rather circular business of saying that because there's an indemnity against the lien, it isn't going to do any harm maybe if we say that the lien arose.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Yes, sir?

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: In his dissent in the second Grillea?

I'm sorry Your Honor, I don't remember.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: On the indemnity feature.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: I don't see why a one man's -- why a man's property may not be taken.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Grillea is -- has certainly led to a great deal of confusion and I think comment in the -- in the District Courts, my Brother has referred to, he ha -- he has said that there are three cases which uphold the in rem liability in this situation.

And of course Grillea, the second Grillea is one of them.

The other two are District Court cases.

One by Judge Dimock in the Southern District, I think, of New York, in Leotta against The Esparta and the other one is Reed against The Yaka in the Third Circuit and that was a District Court decision which is on appeal now, was argued there, I think, on the 18th of last December.

Judge -- the Leotta against The Esparta in New York went off on exceptions to the libel and while Judge Bondy's much earlier decision in Vitozi against Platano which was the in rem in aspect of Vitozi against Balboa Shipping Company.

The judge in -- in that case seem to feel that because there was a shipowner who owned the ship but who was not protected by a Compensation Act perhaps that was an adequate reason for holding the ship in rem, and the same thing is said in the Pennsylvania case, Reed against Yaka, in other words, that although the owner admittedly is not liable in personam, the fact that he is at sometime when going to the ship back takes the stand out of awarding a decree or a judgment which the Longshoremen's and Harbor Worker's Compensation Act has said exceeds what the Congress has said should occur in that type of case.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: Yes, sir.

He does --

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: It's the very question of in rem responsibility.

Unknown Speaker: (Inaudible)

Mr. Seymour P. Edgerton: Cases in that category dealing with longshoremen in Courts of Appeals, I think that this and Grillea are the only two.

I know of no others.

I -- on this question of -- of personification and how far on this question of personification -- personification theory and how far it is to be carried, I think I could comment that Mr. Justice Holmes was one of the writers on the subject back in his work on the common law in 1881 and he talked about the English view and pointed out that personification was carried further in the United States than in England and he thought that because of the convenience security which the ship offered to an injured party whether contract or tort that that might have been one of the reasons for the continued veracity of the personification theory although it apparently arose out of the ancient law of (Inaudible) and conceptions of a -- animistic conceptions.

But when Mr. Justice Holmes came to decide cases in this Court where the personification theory led to inconsistent or illogical results, he had no hesitation in leaving it behind as a fiction as he did both in the Eugene F. Moran and the Western Maid which is cited on page 12 of our brief.

Now, the Western Maid is -- it seems to me, of real importance here because in that case, two vessels privately owned were demised to the United States during World War I and were used as public vessels.

There was no Public Vessels Act in those days.

The Shipping Act 1916 which later became the suits in Admiralty Act didn't cover the situation so that unless the owner of -- those vessels by the way were in collision while they were in the possession of the United States.

Now, when -- those vessels were returned to their owners the end of the war and they were liable in rem.

And this Court said in the Western Maid, Mr. Justice Holmes speaking for the majority said that in a legal sense no tort had been committed by the vessels because at the time the Act was done, there was no means of recovery and that when the vessels passed back to their owners even though on a theory of personification, you could follow the Reeds that this Court wouldn't permit that to be done.

And we think that the analogy here is very plain that the quasi-immunity or quasi -- or the quasi-immunity or satisfaction of a liability of Bordas & Company, the charterer attached to the vessels so that when it -- when it gets beyond that state, it is no longer subject to a maritime lien or to put it in a different way, my Brother says why should this situation of demise cut off the lien.

And we put it -- and view it the other way around, did a lien ever arise in this situation because of the compact and the demise.

Now --

Justice Felix Frankfurter: Suppose you are right.

Mr. Seymour P. Edgerton: Yes, sir.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: By this Court?

Justice William O. Douglas: But it -- didn't that involve questions of sovereign immunity?

Mr. Seymour P. Edgerton: Yes sir.

It did.

Justice William O. Douglas: I don't suppose of any doubt as to --

Mr. Seymour P. Edgerton: Well, it --

Justice Felix Frankfurter: I don't mean that.

I mean that was -- what was the (Inaudible)

Mr. Seymour P. Edgerton: Yes.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Well, that the lien on the vessel did not exist.

Justice Felix Frankfurter: Yes.

I mean (Inaudible)

Mr. Seymour P. Edgerton: Yes, sir.

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Well --

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: I don't --

Justice William O. Douglas: But he said --

Mr. Seymour P. Edgerton: -- know --

Justice William O. Douglas: -- he said in that case, I just happen to be reading it --

Mr. Seymour P. Edgerton: Yes, sir.

Justice William O. Douglas: -- the personality of a public vessel is merged in that of the sovereign.

I suppose that -- there's no relevancy here, does it?

Mr. Seymour P. Edgerton: What was the first of that, Your Honor?

Justice William O. Douglas: The personality of a public vessel is merged in that of the sovereign.

Mr. Seymour P. Edgerton: Well --

Justice William O. Douglas: You're talking about the fiction of the vessel things, I think.

Mr. Seymour P. Edgerton: No.

I don't think that that has any relevance here.

It seems to me that what has relevance here is that the -- in the Western Maid, the sovereign immunity followed the vessel back into the hands of the private owner.

And here, the quasi-immunity of the demisee protected by the Compensation Act should follow as to his liability and his stake in the vessel.

And the general owner had no liability at all.

Now --

Justice Felix Frankfurter: In the record because that isn't -- the Western Maid didn't inject the Doctrine of Sovereign Immunity that is (Inaudible) --

Mr. Seymour P. Edgerton: That's right.

Justice William O. Douglas: But we should take our law from the majority opinion up in the dissent then, are we?

Justice Felix Frankfurter: (Inaudible)

Mr. Seymour P. Edgerton: Did you ask --

Justice William O. Douglas: This is -- was just a little footnote.

Mr. Seymour P. Edgerton: I know of no other cases Mr. Justice Frankfurter involving collisions in which the Western Maid arguments have been followed or discussed at any great length but this Continental Grain Company against the Barge FBL-585 in which the question of transferability of causes of action under 1404, I think it is, of the Judicial Code was discussed.

The majority there in Mr. Justice Black's opinion, I think was, discussed the personality theory and how far it should go and also the City of Norwich and the Consumers Import Company against the KKKZ and those last two cases are cases where the limitation of liability acts of United States provided that under certain circumstances the owner should not be liable in the KK -- Consumers against the KKK, it was the 'Fire Statute' which said that if cargo was damaged by fire, the owner shall not be liable unless he was negligent or procured the fire, the other was the usual limitation section where the owner's interest -- owner's -- what can be taken from the owner shall not exceed the value of the owner's interest in the vessel.

And both of those cases that was asserted that that meant that the owner shouldn't be liable but should -- could still go against the ship and this Court would have nothing to do with that at all.

Now, I want very briefly to mention to the last point in our brief which is the question which is presented if this Court finds that there is in rem liability in this case.

Now, this question is not before you on the record.

It was argued in the Court of Appeals.

You will note from Judge Aldrich's opinion that because of the way they decided the case they didn't find it necessarily to reach this point but it remains in the case and that is this that -- when -- that this carried -- the vessel here was actually seized by the marshal.

It was a case where he actually went aboard onto the process that was on the December the 8th I think, and a couple of weeks later, the claimant -- the respondent Pichirilo filed a claim of the vessel in the form of a motion.

And with that -- and that motion was ascended to.

And in that motion, he asked to put up a bond for $20,000 for the release of the vessel that was presented to and the bond was filed.

Now, we think or -- the District Judge found against the libellant for $30,000 and his decree read against both the ship and the respond -- the personal respondent in the same amount.

I just want you to read J.K. Welding against Gotham Marine which is cited here.

We think that any decree against the ship cannot exceed the amount of the bond even though there's a supersedeas bond --

Justice Felix Frankfurter: (Inaudible)

Rebuttal of Harvey B. Nachman

Mr. Harvey B. Nachman: At the risk of sounding irreverential, I would like to say that Mr. Justice Holmes' discussion of the personality of a ship in the Western Maid was completely unnecessary, the decision of that case.

That case was decided as I read it on the ground that the sovereign cannot pass bad title.

That case was decided before the Public Vessels Acts where you could -- where the sovereign is now no longer immune from suit

So when it had taken the ships from private individuals and then acted either give them back or sell them, the sovereign was in the position of allowing these liens after retransfer to indicate that the sovereign had passed bad title.

It's the same thing of saying that a marshal sale, no different.

And there was no necessity.

I think some of the dissenters in that case went up to discuss the question.

But at any rate whether there was or not Justice Holmes said it is totally immaterial that in dealing with private wrongs, the fiction however originated, that is the fiction of personality of the vessel, is enforced.

So that Mr. Justice Holmes did not destroy the personality fic -- fiction in the Western Maid.All he did was to say it doesn't apply to the sovereign.

And in answer to Mr. Justice Frankfurter's question I think that in the Canadian Aviator, Limited, this Court reaffirmed its position of following the Personality Doctrine.

And Mr. Justice Black in his decision in Continental said that we're not going to use it when a act -- when an action is brought both in personam and in rem and call it two separate actions to avoid transfer to the jurisdiction that is most convenient and in the interest of justice.

And he went on to say that the Personality Doctrine did exist as the re -- for the redress of other wrongs.

But I would like to, for a moment, point out in answer to Mr. Justice Harlan's question of my Brother as to the threshold issue here of whether or not there was a demise.

The captain of the vessel testified that a deposition at which the em -- the purported demisee was present and two proctors for the respondent were present.

He was asked, “By whom are you employed?”

He answered, Ramon Ruiz Pichirilo.

Justice Hugo L. Black: Where is that in the record?

Mr. Harvey B. Nachman: I'm sorry page 10, sir.

Unknown Speaker: (Inaudible)

Mr. Harvey B. Nachman: At the bottom of that page.

He was asked if anyone got hurt.

And he said, “Well, yes.

There was fellow there.

An employee of Bordas & Company, who is refilling the bags with the corn that has spilled on deck and suddenly I saw that the man stayed more like this, etcetera."

On the top of page 11, “Did you make out an accident report?”

He says, “No sir.

I didn't fill out any report.

He was not my employee.”

“Did you report it to anyone?”

“Well of course, Bordas & Company, they hospitalized him.”

I submit, this doesn't sound like a man who is being employed by the demisee.

And the demisee was present, refused to cross-examine although he had two proctors there.

At the trial, the demisee testified.

And he was asked whether he covered this captain under the Workmen's Compensation, this is at the top of page 16 sir.

He was asked whether he covered this man under the Workmen's Compensation because seamen must be covered too under the Workmen's Compensation Law of Puerto Rico.

He said, “No.”

He was asked whether he listed himself as owner or operator with Customs.

He said, “No.”

So that when the Court of Appeals in writing its opinion says that, “We believe the court”, that is the District Court, “was mislead by testimony.”

They completely overlooked the fact that there was a conflict of evidence and they overlooked the fact that the District Court said that it did not believe the testimony of the demisee.

The demisee has been testifying.

This is at page 17.

The demisee has been testifying that he was operating, that he was managing, that he was paying everything.

At the very conclusion of his testimony, the court said to counsel -- to the proctor for the respondent, of course you know pretty well that the doct -- the doctrine in admiralty that there is a non-delegable duty no matter who was managing the thing or who was paying for the payroll, Mr. Bordas clearly stated that the boat belong to Pichirilo.

And that Pichirilo isn't coming here is because he can't leave the Dominican Republic.

But he is the owner and he is the operator of the boat.

The proctor for the respondent said, “No, the owner not the operator.

The operator is Bordas & Company.”

And the court said clearly, “That maybe what you think.

But I don't believe that Bordas is the operator.”

Justice Felix Frankfurter: (Inaudible)

Mr. Harvey B. Nachman: May I suggest Your Honor that he -- that Bordas has been testifying, “I operate.

I manage.

I control.”

And the court said, “I don't believe that you operate it and manage.”

Justice Felix Frankfurter: (Inaudible)

All I'm getting is that he said to (Inaudible) --

Mr. Harvey B. Nachman: Well, if he didn't believe these conclusions, there is also basis of other testimony on which not to believe it.

There was conflicting testimony.

Justice Felix Frankfurter: (Inaudible) he didn't believe the conclusion.

Now, the conclusion (Inaudible) --

Mr. Harvey B. Nachman: That would be so Your Honor if there were only uncontradicted incredible evidences but even if this was the problem and this was the only testimony and it was uncontradicted, its credibility would still have to be sent back to the District Court.

The Court of Appeals has not given a mandate but as I understand McAllister, to review uncontradicted testimony and make a contrary determination on their interpretation of its credibility.

Justice Felix Frankfurter: (Inaudible)

Mr. Harvey B. Nachman: Mr. Edgerton also lays, sir, the question of the real problem that arise if you kept in personam liability of the shipowner after demise.

And the only hypothetical situation that he saw was there was a problem was a case where a seaman might sue his employ – employer, the demisee and lose and then later sue the shipowner.

And I submit that if this is not precluded by res judicata, it is certainly precluded by every principle of collateral estoppel.

If he's suing on the same operative facts for a condition alleged to be unseaworthy, he doesn't get too cracked about it against two different people, one as his employer and the other as the shipowner.

And I think that this is a straw man.

There is no prejudice to the shipowner by making him liable in personam because he has always the right over against everybody who was act – who actively created any condition that cause any harm.

May I point out that in Sieracki, the Court held the legislation, that is the Federal Longshoremen and Harbor Worker's Compensation Act, did not nullify any right of the longshoreman against the owner of the ship except possibly in the instance presumably rare where he maybe hired by the owner.

Now, Court went on to say all considerations which have given birth to the liability, that is the liability for unseaworthiness and have shaped its absolute character, dictate that the owner should not be free to nullify it by parceling out his operations to intermediary employers whose sole business is to takeover portions of the ships work or by other devices which would strip the men of – then performing it service of their historic protection.

Now, I submit that there is absolutely no difference here than the argument in the Ryan case.

The fact that there is a demise doesn't make it any different than if they're just stevedoring contract.

He suit -- sue the shipowner, the shipowner says, “I'm not really personally liable.

It wasn't my fault.

It was the fault of the man who was in charge of the vessel at the time.”

And the man in charge of the vessel says, “I can't be held responsible because I have to pay compensation.

And it would be unfair because I have to pay compensation to hold the other men because I will have to pay twice.”

And these considerations have come up in every one of this demise cases since Grillea.

And these arguments of the respondent have been rejected by every court because it's the same argument.

In Reed against The Yaka which is cited at pages 16 and 17 of petitioner's brief, the court, this is the Pennsylvania District Court said, “We simply point out that whatever bundle of rights in the ship the real owner surrenders under a bareboat charter he does retain the right to the return of the ship at some future date.”

Moreover, the question of operation and control of the ship would appear to have no real significance in an in rem action for unseaworthiness since unseaworthiness is not based upon negligence or any wrongful act rather it is a form of absolute liability which is imposed regardless of fault, goes on to say that they are not persuaded by the nature of a bareboat charter, envisage -- they envisage a situation in which there is no indemnity contract just like we have in the case at bar.

And they say, “The only difference in such a case and the case that they were having was the Indemnity Clause", which they held at Ryan determine it.

They point out that the Second Circuit has considered Grillea since its inception -- since its writing.

And they have -- and Mr. Justice or rather Judge Hand quotation in the Latus case is quite clear, says we can find no decision in which such a lien has been posed on a ship for fault of another person other than the owner when the fault is not that of a bareboat charter or some specified class of a person like a compulsory pilot citing Grillea.

And then he goes and says, “Grillea merely held that a longshoreman might sue a ship in rem if he was injured by her unseaworthiness.”

So that's what we've got here.

We got a man injured by the unseaworthiness of a vessel.

And they say that we can't sue them in rem anymore because we're the only kind of people who've lost our lien against the vessel.

Of course, you may only say that there's no need to ever consider the argument last mentioned by my colleague because if you agree that the findings of the District Court were not clearly erroneous, you've got a judgment against two responsible parties and who have posted a supersedeas amount for any excess amount as between the both of them so that you -- no one could ever reach the problem of whether or not the liability is limited in rem to $20,000 because you got two respondents both of whom are liable, that is the in personam respondent and – and the in rem respondent and they have posted security which has substituted for the vessel.

And this action on appeal is a -- shows an action against that security.

Thank you.