213 F.

2d 479

Petition of TEXAS CO.

THE WASHINGTON.
No. 222.
No. 266.
Docket 23008.
Docket 23064.

United States Court of Appeals Second Circuit.

Argued April 7 and 8, 1954.
Decided May 26, 1954.

On November 15, 1952, the Tanker Washington, owned by The Texas

Company, collided with the U. S. S. Ruchamkin at sea near Cape Henry,
Virginia. As a result, eight personal injury and death actions were filed
against The Texas Company in the district court, and a libel was filed by
the United States, as owner of the U. S. S. Ruchamkin in the United States
District Court for the Eastern District of Virginia. The total damages
sought in all these suits was $2,225,180, on April 17, 1953, The Texas
Company commenced limitation proceedings in the court below and filed
an ad interim stipulation for value in the sum of $2,109,957.58. The usual
injunction order was issued against the commencement or prosecution of
all suits or proceedings except in the limitation proceeding and a monition
issued to all claimants to file their claims on or before June 2, 1953.
The plaintiffs in the pending suits, other than the United States, moved
before Judge Ryan for modification of the injunction order, to permit the
movants to proceed with their suits but reserving to the court below "the
determination of the issue of exoneration from or limitation of liability."
Judge Ryan, by an order dated November 17, 1953, denied the motion. He
wrote an opinion reading as follows:
"Petitioner, as owner of the tanker Washington has petitioned for
exoneration from or limitation of liability under 46 U.S.C.A. 183-9.
This motion is to modify a restraining order dated April 17, 1953 which
enjoined suits brought by individual claimants.

"Section 183(a) provides that `the liability of the owner of any vessel * *
for any loss, damage, or injury by collision * * * done, occasioned, or
incurred, without the privity or knowledge of such owner or owners, shall
not * * * exceed the amount or value of the interest of such owner in such
vessel, and her freight then pending.' Movants allege that the sum total of
claims against the vessel is less than the value of it and her freight, that
this Court has no jurisdiction to grant limitation of liability and
consequently no power to enjoin individual actions.
"It appears, however, that the total of the claims originally made was
greater than the value of the vessel, although some of these claims were
reduced subsequent to the filing of the petition for limitation. The fact that
claims greater than the value of the vessel and cargo were asserted gave
the Court jurisdiction to entertain the petition for limitation. This
jurisdiction is not divested by subsequent diminution of claims. The
Tolchester [D.C.], 42 F. 180, and The John K. Gilkinson [D. C.], 150 F.
454. The individual suits may not be allowed to continue even for the
purpose of ascertaining damages. The Tolchester.
"Supreme Court Admiralty Rule 54 [28 U.S.C.A.] provides that the
petition for limitation of liability, if the vessel has not been libeled, may
be brought in the district court for any district in which the owner has been
sued in respect to any such claim. Eight actions have been commenced in
this district. Venue has been properly laid and the restraining order was
proper.
"Since I have concluded that subsequent reduction of claims does not
affect jurisdiction, it will serve no useful purpose to withhold decision on
this motion pending the contemplated filing of additional stipulations of
reduction.
"Motion denied."
Before Judge Weinfeld, the United States moved to transfer the libel
instituted against it by The Texas Company to the United States District
Court for the Eastern District of Virginia, to be there tried with the libel
which the United States had there previously instituted against The Texas
Company. The United States also moved to modify the injunction order so
as to permit the suit in the Virginia district to go forward. There was
presented to Judge Weinfeld a stipulation by the various plaintiffs,
including the United States, that they had reduced their claims so that in
the aggregate they amounted to $1,754,333.93.1 It appears that these
stipulations were also at some time presented to Judge Ryan.

The stipulation by the plaintiffs other than the United States stated that
they would not increase the amount of their claims at any future date if
The Texas Company's petition for limitation of liability were forthwith
dismissed. However, in this court, on the argument of the appeal, all the
claimants advised this court that they will file an amended stipulation in
the district court agreeing that their claims will never be increased, that
the claimants will not enter judgment in any court in excess of the
stipulated amounts, and that any claim of res judicata relevant to the issue
of limited liability, based on a judgment in any other court, is waived.
Judge Weinfeld granted the motion of the United States. His order, dated
January 29, 1954, reserved for determination by the court below, The
Texas Company's right to all other relief prayed for in its limitation
petition. His opinion is reported in 116 F.Supp. 915.
From Judge Weinfeld's order, The Texas Company has appealed; from
Judge Ryan's order, the claimants who had moved before him for
modification of the injunction have appealed.
Thacher, Proffitt, Prizer & Crawley, New York City (Joseph M. Brush,
New York City, of counsel), for Texas Co.
J. Edward Lumbard, U. S. Atty. for Southern District of New York, New
York City (Louis E. Greco, New York City, of counsel), for the United
States.
Sterling & Schwartz, New York City (Marvin Schwartz and Betty Olchin,
New York City, of counsel), for claimants.
Before CHASE, Chief Judge, and SWAN and FRANK, Circuit Judges.
FRANK, Circuit Judge.

1. The United States has moved to dismiss The Texas Company's appeal from
Judge Weinfeld's order. The motion is denied. We have jurisdiction of the
appeals. See W. E. Hedger Transp. Corp. v. Gallotta, 2 Cir., 145 F.2d 870;
Curtis Bay Towing Co. v. Tug Kevin Moran, Inc., 2 Cir., 159 F.2d 273.

2. Although the claims as originally filed exceeded the fund (or stipulated
value) of $2,109,957.58, they have now been reduced by stipulation so that the
fund is about $350,000 in excess of all filed claims. As a consequence, we do
not have the problem of a distribution of an insufficient fund contemplated by

the statute. For 46 U.S.C.A. 184 provides that, when loss is suffered by
several persons, "and the whole value of the vessel, and her freight for the
voyage, is not sufficient to make compensation to each of them, they shall
receive compensation * * * in proportion to their respective losses", and that
the limitation proceedings are "for the pur- pose of apportioning the sum * * *
among the parties entitled thereto." 2
3

We have several times announced the principles which we think must apply
here: Absent an insufficient fund (1) the statutory privilege of limiting liability
is not in the nature of a forum non conveniens doctrine, and (2) the statute gives
a ship-owner, sued in several suits (even if in divers places) by divers persons,
no advantage over other kinds of defendants in the same position. Concourse is
to be granted "only when * * * necessary in order to distribute an inadequate
fund."3 The "purpose of limitation proceedings is not to prevent a multiplicity
of suits but, in an equitable fashion, to provide a marshalling of assets the
distribution pro rata of an inadequate fund among claimants, none of whom can
be paid in full."4 We see nothing to the contrary in Maryland Casualty Co. v.
Cushing, 347 U.S. 409, 74 S.Ct. 608, where the claims aggregated $600,000
and the Court was advised the valuation was but $25,000.

3. The Texas Company asserts, however, that the record shows there are or
may be persons injured by the collision who have not yet filed but who may
later file claims which, together with those already filed, may exceed the fund.
But, as in Curtis Bay Towing Co. v. Tug Kevin Moran, Inc., 2 Cir., 159 F.2d
273, on the facts here with the maximum amount of the filed claims fixed by
stipulation there is little likelihood that other claims will be asserted before
they are barred by applicable statutes of limitation or otherwise. As in that case,
the district court will retain jurisdiction of the limitation proceeding, so that if,
"by some chance * * * other claims should appear which will make a
concourse proper, a concourse can take over the situation as it then is * * *."
Accordingly, we deem irrelevant the argument of The Texas Company as to
ouster of the jurisdiction of the court below.

4. For the reasons stated in Judge Weinfeld's opinion, we think his order
correct.5 It will be affirmed on the condition that the proffered amendment to
the stipuation will be filed promptly in the district court. On the same
condition, we reverse Judge Ryan's order.

Notes:

The United States stipulated that its entire claim, theretofore stated as $800,000,
was $601,833.93, and that any contingent claims it had asserted for
hospitalization and pensions were merely by way of setoff which would arise
when and if the Texas Company should pay an injury claim and then assert
such payment as part of the Texas Company's alleged claim against the United
States

Emphasis added

Curtis Bay Towing Co. v. Tug Kevin Moran, Inc., 2 Cir., 159 F.2d 273, 276

Petition of Moran Transp. Corp., 2 Cir., 185 F.2d 386, 388-389. See also
Petition of Red Star Barge Line, Inc., 2 Cir., 160 F.2d 436; The Aquitania,
D.C., 14 F.2d 456, 458, affirmed, 2 Cir., 20 F. 2d 457

This court has heretofore dismissed the appeal from Judge Weinfeld's order
transferring to the Virginia district the suit by The Texas Company against the
United States