Luckenbach v. McCahan Sugar Rfg. Co., 248 U.S. 139 (1918)

Please note: this case begins in mid-page. It therefore shares a citation with the last page of the previous case. If you are attempting to follow a link to the last page of 248 U.S. 132, click here.

Luckenbach v. W. J. McCahan Sugar Refining Company

No. 51

Argued November 18, 1918
Decided December 9, 1918
248 U.S. 139

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

Where the bills of lading stipulated that the carrier should have the benefit of any insurance that might be effected by the shipper, but the shipper’s policies provided that the insurers should not be liable for merchandise shipped under bills containing such stipulations or in the possession of any carrier who might be liable for its loss or damage, held, that an arrangement between the insurers and the shipper whereby the former loaned to the latter the amount of a loss caused by the carrier’s negligence, to be repaid only insofar as the shipper recovered from the carrier, otherwise to operate in effect as absolute payment under the policies, and whereby, as security, the shipper pledged such prospective recovery and the bills of lading and agreed to prosecute suit against the carrier at the expense and under the exclusive direction and control of the insurers, was a lawful arrangement; that the loan was not a payment of the insurance and the carrier was not entitled to the benefit of it, and that a libel brought in the shipper’s name, for the benefit of the insurers, pursuant to the agreement, could be maintained against the carrier and the ship. P. 148.

Liability for unseaworthiness, resting on the personal contract of the shipowner, is not limited by Rev.Stats. § 4283, or the Act of June 26, 1884. P. 149.

A time charter characterizing the vessel as "tight, staunch, [and] strong" on delivery, and binding the owners to "maintain her in a thoroughly efficient state in hull and machinery for and during the service," imports a warranty, without limitation, of seaworthiness not merely at delivery, but at the commencement of every voyage. P. 150.

A time charter, like a charter for a single voyage, is not a demise of the ship, and leaves the charterer without control over her maintenance and repair, though liable without limitation to shippers for losses due to unseaworthiness discoverable by the exercise of due diligence on the part of the owners. Id.

A charter party was signed by but one of the owners, but the rest, being impleaded with him, admitted that he acted for all, and the liability of all, if liability existed, was not controverted. Held that a decree for damages should run against all. P. 151.

235 F. 388 modified and affirmed.

The case is stated in the opinion.