MR. JUSTICE BLACK delivered the opinion of the Court.
The question presented is whether a towboat may validly contract against all liability for its own negligent towage. Since there is no controlling statute the question must be decided as a part of the judicially created admiralty law. Federal courts have disagreed as to whether
The record including the findings of fact shows: Petitioner's oil barge Bisso while being towed up the Mississippi River by the respondent's steam towboat Cairo collided with a bridge pier and sank. At the time, the barge had no motive power, steering apparatus, officers or crew, its movements being completely controlled by the Cairo. Negligent towage by those operating the Cairo caused the collision. Consequently, respondent, owner of the Cairo, would have been required to pay petitioner damages unless relieved of liability by certain clauses in the towage contract. One provides that the towing movement should be at the "sole risk" of the barge, and a second provides that masters, crews and employees of the towboat Cairo should "in the performance of said service, become and be the servants" of the barge Bisso. The Court of Appeals construed both these clauses as relieving respondent from liability for its negligence and held both valid.
A release-from-liability clause in a towage contract was first considered by this Court in 1871 in The Steamer Syracuse, 12 Wall. 167. There negligent towage by the Syracuse damaged a canal-boat being towed. To escape liability owners of the towboat relied on a contractual agreement that "the canal-boat was being towed at her own risk." Notwithstanding the agreement, this Court held that the towboat "must be visited with the consequences" of its negligence.
In 1909 The Syracuse was repudiated by the Second Circuit in The Oceanica, 170 F. 893. That court construed a contract requiring a towed vessel to "assume all risks" as exempting the tower from responsibility for its negligence; it also held, over strong dissent, that the contract was not invalid as against public policy. And on rehearing the court conceded that "the decision of the majority of the court as to the right of a tug to contract against her own negligence is a departure from previous decisions." The court went on to express hope that the question would "be set at rest in this case by the Supreme Court." Certiorari was denied,
It was in that state of intercircuit conflict that this Court again, in 1928, considered the effect of a contract claimed to exempt a towboat from its negligence. The Wash Gray, 277 U.S. 66.
It is nevertheless argued that The Syracuse and The Wash Gray did not announce a rule of public policy against release-from-negligence contracts but decided no more than what the towage contracts in those cases meant. Strong arguments can be made in support of this contention but we think stronger arguments can be made against it. The Syracuse was decided in an era of manifest judicial hostility toward release-from-negligence contracts, particularly those made by businesses dealing widely with the public and having potential monopolistic powers.
This rule is merely a particular application to the towage business of a general rule long used by courts and legislatures to prevent enforcement of release-from-negligence contracts in many relationships such as bailors and
The practical result of leaving towers wholly free to contract against all liability for their negligence is strikingly illustrated in an English case. The Port of London
It is contended that the towage contract rule we have accepted was rejected by this Court in Sun Oil Co. v. Dalzell Towing Co., 287 U.S. 291.
There are distinctions between a pilotage and a towage exemption clause which make it entirely reasonable to hold one valid and the other invalid. A pilotage clause exempts for the negligence of pilots only; a towage clause exempts from all negligence of all towage employees. Pilots hold a unique position in the maritime world and have been regulated extensively both by the States and Federal Government.
The second clause in the contract—that the employees of the towboat Cairo should be servants of the barge Bisso—likewise cannot be enforced. For if valid, the only effect of that clause would be to shift all liability for negligent towage from the towboat to the vessel being towed, precisely what the first clause attempted to do.
MR. JUSTICE HARLAN took no part in the consideration or decision of this case.
MR. JUSTICE DOUGLAS, concurring.
I join in the opinion of the Court. I do not think we know enough about the economics and organization of this business
I agree with the Court that Sun Oil Co. v. Dalzell Towing Co., 287 U.S. 291, was not a departure from that rule. In that case the vessel which was being assisted by the tugs was under her own power and was manned by her own crew. The negligence was that of a tug captain on board the vessel under tow. The Court enforced the contract, which made his negligence the negligence of the vessel, under the familiar rule that "when one puts his employee at the disposal and under the direction of another for the performance of service for the latter, such employee while so engaged acts directly for and is to be deemed the employee of the latter and not of the former." Id., at 295.
In the Sun Oil case, the tug was not a common carrier or a contract carrier. It was merely assisting a vessel under her own power. Here we are dealing with dead tows, where the tug and the tug alone is in control, where the tows are without power and without crews.
In that situation, the tugboats are common carriers
So far as we know, the tugboats in the present cases are as much common carriers as the tugboats in the Cornell Steamboat case and the Stimson Lumber Co. case.
Common carriers may not "by any form of agreement secure exemption from liability for loss or damage caused
If the tug is only a contract carrier, it is not liable for injury to the tow in the absence of negligence. See Stevens v. The White City, 285 U.S. 195. But though a contract carrier, the tug may as effectively command the market and have as complete control of the tow and cargo as any common carrier. The reasons stated by Judge Coxe seem, therefore, as germane to the contract carrier as to the common carrier.
It may be that the rule of The Syracuse is outmoded and should be changed. It may be that the tugboat industry is less able to carry the risks of those losses than its customers. It may be fairer in the long run to let the tugboat operator free himself from his own negligence and transfer the liability to the shippers who employ his services. But the very statement of the problem raises large questions of policy on which the present records throw no light. We would have to know much more about the economics and organization of the tugboat
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE REED and MR. JUSTICE BURTON join, dissenting.
Drawing on its constitutional powers in matters maritime (Art. III, § 2), this Court has probably made as much substantive admiralty law through adjudication as has Congress by legislation. Indeed, not a little of legislation has displaced or modified the Court's decisions. This creative judicial function of making admiralty law remains unimpaired, so that it is within the Court's jurisdiction now to announce, as new doctrine, that tow and tug may not by agreement relieve the tug of liability for damage to the tow caused by the tug's negligence. Of course, the Court should not restrict the area of full bargaining between tow and tug unless an overriding public interest calls for such restriction.
But the Court does not now profess to originate a doctrine of invalidity of such an agreement. Pervading the Court's opinion is the assumption that it is merely making explicit what has been the presupposition and direction, if not the unequivocal pronouncement, of the controlling body of decisions. These decisions, we are told, "strongly point to the existence of a judicial rule, based on public policy, invalidating contracts releasing towers from all liability for their negligence." On this
To assert that a rule has been established by courts necessarily implies authoritative pronouncement of a doctrine, its application to litigation, and its continuing vitality. Such a rule ought to be found in adjudications in this Court or at the very least—in the case of maritime matters—in the weight of authority in lower courts, particularly in the Southern District of New York where admiralty law has to such a large extent developed. The claimed rule cannot avouch the decisions in this Court nor the body of lower court decisions. In their entirety, the decisions reflect the opposite. A critical examination of them yields these conclusions:
The materials on which these conclusions are based are not esoteric. They are to be assessed, of course, according to time-honored rules for reading cases—that cases hold only what they decide, not what slipshod or ignorant headnote writers state them to decide; that decisions are one thing, gratuitous remarks another. A stew may be a delicious dish. But a stew is not to be made in law by throwing together indiscriminately decision and dicta, cases involving common carriers and private carriers, cases involving monopolistic or otherwise patently unequal bargaining power and cases arising under contracts between parties bargaining at arm's length.
It is essential in examining these cases to differentiate sharply between construction and validity. Since negligence is the ordinary basis for liability, relief from it should be clearly agreed upon between the parties and ambiguity should not leave the extent of such relief in doubt. Accordingly, provisions for exemption are closely scrutinized by courts and doubts either as to the existence of the provision of exemption or its scope are resolved against relief from responsibility. It is fair to say that a number of the cases relied upon for support against the
These conclusions require documentation.
DECISIONS OF THIS COURT.
1. In The Steamer Syracuse, 12 Wall. 167, the crucial issue in the District Court, on appeal in the Circuit Court, and on appeal here, was whether or not on the particular facts of that case the steamer Syracuse had been "navigated with ordinary care and skill."
The Syracuse had been engaged in towing canalboats through New York harbor. The tug's owners had given the owners of the tow a receipt stating that the service was to be performed "at the risk of her owners." In a libel based on the tug's negligence in permitting the tow to strike an anchored vessel and be sunk, the District Court held that, while the parties were free to vary their responsibilities by contract, the words of the receipt
The language of both Mr. Justice Nelson, in the Circuit Court, and Mr. Justice Davis, for this Court, must be read in the light of the issues that were framed in the District Court, the course of evidence in that court, the contentions of the parties and the explicitness of the briefs
Reliance upon any climate of "manifest judicial hostility toward release-from-negligence contracts" existing at this time is singularly misplaced. In this period American legal thought placed entirely too high a value upon liberty of contract. See Pound, Liberty of Contract, 18 Yale L. J. 454. Had there been such an attitude, it could not have been a factor in a case in which both parties agreed that no such contract was involved. Moreover, this hostility, insofar as it was more than a mode of narrowly construing contracts designed to cut down common-law liability, was limited to situations where inequality of bargaining power in relation to essential services called for judicial intervention. Compare Railroad Co. v. Lockwood, supra, with Baltimore & Ohio S. R. Co. v. Voigt, 176 U.S. 498; Santa Fe, P. & P. R. Co. v. Grant Bros. Const. Co., 228 U.S. 177.
2. The superficial ambiguity of the language of the Court's opinion in The Steamer Syracuse, when read
This citation of The Steamer Syracuse as an example of instances in which a rule of narrow construction of exculpatory clauses had been invoked should have set to rest any misunderstanding concerning the scope of its ruling.
3. Compania de Navegacion Interior, S. A. v. Fireman's Fund Ins. Co., 277 U.S. 66 (The Wash Gray), was a consolidation of libels by the owner of the Wash Gray, lost while in tow on the Gulf of Mexico, against eleven insurance companies which had underwritten the voyage. One of the defenses of the insurers was that the contract of towage had contained, unknown to them, the following provision which they alleged to have been material to the risk:
The District Court had held that the towage clause "does not pretend to release liability for loss or damage growing out of the tower's negligence. Such an intention would be defeated by the very obscurity of its terms." 14 F.2d 196, 200. The Court of Appeals reversal rested on grounds not here relevant. 19 F.2d 493.
On writ of certiorari, this Court, reversing the Court of Appeals, dismissed the contention of the insurers in the following terms:
The wording of the clause differed, to be sure, from that involved in The Steamer Syracuse. But the language relied upon by the insurers, in the context of the rest of the clause and the undertaking involved, was no more suggestive of an attempt to avoid liability for negligence than that construed in The Steamer Syracuse. It is hardly surprising that the Court applied, at the instance of the party to the contract, the narrower meaning which the parties in The Steamer Syracuse had conceded to be proper, and rejected the insurer's attempt to escape liability by attributing the broadest meaning to the clause.
4. Any support for the present decision drawn from the language of The Steamer Syracuse and The Wash Gray is decisively repelled by the decision in Sun Oil Co. v. Dalzell Towing Co., 287 U.S. 291. That case involved the following clause of a contract for assistance of a tanker to its berth at Bergen, New Jersey:
The opinion distinguishes The Steamer Syracuse and The Wash Gray not on the ground that there is an essential difference between considerations of policy applicable to towage and pilotage, but expressly and only on the ground that the provisions of the contracts differed, thus viewing the earlier cases as involving no more than matters of construction. Of course there are differences between the situation before the Court in Sun Oil and the one now before us. But the analysis which led the Court to its conclusion there is equally applicable here and calls for upholding the validity of this agreement.
DECISIONS IN THE LOWER COURTS.
1. Concededly, the Second Circuit has, ever since the decision in The Oceanica, 170 F. 893 (1909),
2. In a series of three cases, the Sixth Circuit has assiduously avoided the issue of validity of exculpatory clauses, resting instead upon construction of the clause in issue as not reaching the negligence involved. Great Lakes Towing Co. v. Bethlehem Transp. Corp., 65 F.2d 543;
3. The Ninth Circuit is the only Circuit which has indicated —but not decided—that it might differ with the Second, Fourth and Fifth Circuit Courts of Appeals were it forced to pass squarely on the issue of validity. The statement in the syllabus to the first of the relevant cases in the Ninth Circuit, Alaska Commercial Co. v. Williams, 128 F. 362, is inaccurate. While it says that a tug "cannot relieve itself by contract from liability for the failure to exercise reasonable care and skill," the
Mylroie v. British Columbia Tug Co., 268 F. 449, involved a contract of towage which stated:
The barge had been lost after a sudden change of course by the tug, made without warning to the barge, caused the towline to snap. The Court of Appeals was ready to hold, and appeared to view the Alaska Commercial case as holding, that the tower could not, for reasons of public policy, avoid liability for negligence. Such a holding also was attributed to The Steamer Syracuse. But, in a rather confused opinion, the court appears to adopt the view that the exculpatory clause presupposed the tug's seaworthiness which in fact was negatived by the absence of a sufficient crew. Thus the clause was inapplicable. 268 F., at 453. The decision was affirmed in this Court on the ground that, as a matter of construction and in accordance with English decisions, the clause meant only that the tug should not be liable if it had rendered reasonable assistance to the barge. Holding that the tug had not done so, the Court stated: "This makes it unnecessary for us to consider the contention on behalf of the
Subsequent developments have not made the Ninth Circuit's position any clearer. In Sacramento Navigation Co. v. Salz, 3 F.2d 759, reversed here on other grounds, 273 U.S. 326, that Circuit considered a contract between the owner of a barge and a shipper of merchandise which excused the former from liability for "dangers of fire and navigation." The tug, also owned by the bargeowner, negligently caused loss of the barge and its cargo. The court dismissed the contention that the bargeowner might avoid liability under the quoted provision of the contract expressly as a matter of construction, and, in so doing, indicated that The Steamer Syracuse, The Oceanica, and Mylroie merely reflected differing constructions of exculpatory clauses.
After reviewing contra decisions in other circuits:
The court decided, however, that the principles of the Sun Oil case were instead to be applied, holding the exculpatory clause valid.
4. It is safe to say that, aside from temporary intra-circuit conflicts within the Second Circuit,
INTERPRETATION AND VALIDITY OF THE EXCULPATORY TOWAGE CLAUSE.
We are not presented with a longstanding admiralty rule based on public policy invalidating contracts releasing towers from all liability for their negligence. In fact, we are presented with no rule other than that of the Second Circuit and those following it. Private parties have been free for over a century and a half to contract with reference to the rights and liabilities incident to towage. We cannot assume that they have been misled into a contrary belief. Critical analysis of the authorities, both in this country and in England,
This Court has not, to be sure, in every instance awaited congressional action before imposing views of public policy upon contracting parties. But it has limited its interference in the field of transportation to relationships between common carriers and their customers, concededly not the relationship before us. We have held that the towage relationship is even less than one of marine bailment, Stevens v. The White City, 285 U.S. 195, as to which, under the rulings of the lower federal
The considerations which have governed this Court's role as arbiter of the public interest in exculpatory contracts were recently enunciated by the unanimous Court in the Sun Oil case. They bear repetition:
These considerations of policy are equally present here and call for the result reached in Sun Oil.
Nothing in the record hints at any inequality of bargaining power between the parties to this contract, nor is there any basis for taking judicial notice that the tug industry as an industry is in concentrated ownership.
The argument is made that permitting the parties to grant immunity to the tug will stimulate irresponsibility, or, at least, that it is necessary to force the tug to bear losses resulting from its negligence in order to provide an
It is suggested that a distinction should be drawn between exemption of pilots from liability and exemption of towers. Reliance is placed on the unique position of pilots in the maritime world and the extensive regulation to which they are subjected: they are assimilated to public officers. If the pilotage involved in Sun Oil took place in the detailed regulatory context thus suggested, decision in this case should follow a fortiori from Sun Oil in allowing the agreement of the parties to stand. For quasi-public status and detailed regulation of the qualifications for, and manner of, doing business, with the limited competition which such regulation constrains, are characteristic of the public carrier. If the result in Sun Oil was reached despite similarities that brought the situation in proximity to decisions denying common carriers the right to contract against liability for negligence, the absence of these factors here emphasizes the applicability of the analysis of that case to the problem before us.
There is in each of these cases decided today a question of construction of the exculpatory clause. We have noted that the courts have wisely insisted on clear language to avoid the incidents which the law, apart from the voluntary arrangements of the parties, applies to the towage relationship. In the present case, the clause used seems
The District Court held that, while the "sole risk" clause did not sufficiently spell out an exemption from liability
I would affirm.
For an English historical account see Bowen, A Hundred Years of Towage (1933).
"We are not called upon to decide whether the owner of a tug or the tug itself, which is operating under a contract containing the standard towing conditions, may ever escape liability to a third party for injuries caused by its negligence." 209 F. 2d, at 414.
In context, however, it is clear that this merely amounts to a reservation of the question whether the third party's right to sue the tug was affected by the pilotage clause. In permitting the third party to recover directly from the tow owner by virtue of the clause, the Fourth Circuit necessarily affirmed the right of the tug to shift the burden of liability to the tow.
"When a vessel is towed or pushed stern first by one tug, the service will be under the control and direction of the master of the vessel so assisted, and the tug will not be liable for any damages that may be sustained or caused . . . ."
The tug in this case had been engaged in pushing a steamer stern first away from its pier when the bow of the steamer struck the dock. The Court of Appeals held the quoted clause inapplicable because in fact the tug had not been operating under the control and direction of the master of the steamer. No question of the validity of an exculpatory clause was involved.
"Were we therefore compelled to decide the case upon the validity of paragraph 17, it might seem to us that decision must be controlled by the doctrine of The Syracuse, whatever might be our own views of the principle or its applicability to the present case. A narrower ground for decision, however, appears." 165 F. 2d, at 371.
"The appellant cites The Oceanica . . . [there the Second Circuit], while accepting the rule that a contract will not be construed to cover the carrier's negligence, unless the intention to do so is expressly stated, held, one judge dissenting, that a tug, being only liable for negligence, if the tow agrees to assume all risks, no risks can be meant, except . . . the consequences of her own negligence. . . . We think that it is a departure from the principles announced in the decisions of the Supreme Court which we have cited. It may be said, by way of distinguishing . . . The Oceanica . . . that the court found in the terms thereof an intention of the contracting parties to absolve the tug from the consequences of its own negligence, whereas, in the case at bar, the contract is wholly between a shipper of cargo and the owner of the barge . . . ." 3 F. 2d, at 761.
Just as has been true of decisions in this country, however, specific language directed at liability for negligence must be used. Thus, where the contract merely stated "all transporting to be at owners' risk," the tower was held liable. The phrase was interpreted merely to mean that if the tug exercised reasonable care and skill the tow would incur the risks incidental to navigation. The Forfarshire,  P. D. 339; see also, The West Cock,  P. D. 208 (C. A.). The parallel to The Steamer Syracuse and The Wash Gray requires no elaboration.
The leading encyclopedias of American case law note an apparent conflict among the circuits on the question of validity of the tug-tow exculpatory contracts. They do not suggest that there is controlling authority in this Court, and tend to support the validity of such exemption. 86 Corpus Juris Secundum (1954) 1038 ("It has been judicially noted that the apparent conflict in authority may arise from failure to use sufficiently unequivocal language in the release clause."); 63 Corpus Juris (1933) 60, § 136 ("it has been said that such question has not yet been authoritatively determined."); 48 American Jurisprudence (1943) 346, § 508 ("Although there are some holdings to the contrary, the weight of judicial opinion seems to favor the view that it is competent for a tower, by a stipulation assented to by the tow, to exempt itself from liability for loss or injury caused by its own negligence.").
"(4) The movement contemplated will be done at the sole risk of the `craft to be towed' and its cargo and neither the boats and/or any other equipment used in said service nor the owner, charterer, or hirer thereof shall be liable for any loss or damage to the `craft to be towed' or its cargo nor for any damage done by the `craft to be towed,' however occurring. The masters and crews and employees of all boats and/or other equipment assisting the `craft to be towed' shall, in the performance of said service, become and be the servants of the `craft to be towed,' regardless of whether the `craft to be towed' assists in the service in any way and irrespective of whether they be aboard the `craft to be towed' or in command thereof. Nothing herein contained, however, shall be construed as making the `craft to be towed,' its owners, charterers or operators liable or responsible for loss of or damage to the property of Federal Barge Lines or third parties or for loss of life or personal injury for which the `craft to be towed' its owners, charterers or operators would not otherwise be liable or responsible.
"(5) `Owner' agrees to indemnify and hold harmless Federal Barge Lines from any liability to or for account of the crew of the `craft to be towed' because of any accident, damage, injury or loss of life to the said crew, or any loss of personal property or effects of the said crew, however arising, and the `owner' agrees to defend any and all suits or other actions which may be brought against Federal Barge Lines by or for account of the members of such crews for the reasons aforesaid, and to pay, satisfy, or discharge any and all judgments that may be rendered therein, to the full acquittance and discharge of Federal Barge Lines."