exempt shipowners from liabilities not embraced in this act.' In Gokey v. Fort (D. C.) 44 Fed. 364, Brown, J., said: 'I think the act of 1884 is doubtless to be treated as in pari materia with the act of 1851 (Rev. St. §§ 4233-4285), and designed to extend the act of 1851 to cases of the master's acts or contracts, and thus to bring our law into harmony with the general maritime law on this subject.'"

Amendment of June 19, 1886—Constitutionality

The act of June 19, 1886, was, in terms, an amendment of the act of 1851. The original act had debarred from its benefits the owners of any canal boat, barge, or lighter, or any vessel used in rivers or inland navigation. There had been some discussion as to the meaning of "inland navigation" under this law, and it had been held, among others, that the exception did not apply to the Great Lakes.15

The question of the constitutionality of these acts has been considered in two notable cases. In Lord v. Goodall, N. & P. S. S. Co.,18 the constitutionality of the act was upheld under the commerce clause of the Constitution; that being a case of a vessel which navigated the high seas between ports of the same state. But afterwards the question as to the validity of the law in relation to vessels engaged solely in inland navigation came before the court, and the constitutionality of the law was sustained under the admiralty clause of the Constitution, independent of the commerce clause. The reasoning of the court is, in substance, that the doctrine of limited liability is an established part of the general maritime law, and that, while that general law has no place in our jurisprudence until adopted, the right to adopt it at any time is clearly vested in Congress. This question has been discussed fully in the chapter re

15 Craig v. Continental Ins. Co., 141 U. S. 638, 12 Sup. Ct. 97, 35 L. Ed. 886.

16 4 Sawy. 292, Fed. Cas. No. 8,506; Id., 102 U. S. 541, 26 L. Ed.

HUGHES,ADм. (2D ED.)-23

lating to injuries resulting in death, to which reference is made.17

17

BY WHOM LIMITATION OF LIABILITY MAY BE CLAIMED

162. The benefit of the act may be claimed by any owner or part owner who had no privity or knowledge of the fault which gave rise to the liability.

Where a vessel is owned by several parties, and incurs liabilities, though those liabilities are incurred by the master or managing owner, the other part owners, who had no privity or knowledge of it, can claim the benefit of the act, and limit their responsibility to the value of their several part interests. This applies to debts and liabilities contracted in the usual course of trade of a vessel, as well as to torts.18 Its benefits may be claimed by the underwriter to whom a vessel has been abandoned, and against any liability incurred while the vessel is in charge of their agent.1

As the act is part of the general maritime law, it may be claimed by a foreigner.20

But it can be claimed only by an owner or charterer operating the ship. One who hires a ship under a contract which leaves her operation to some one else cannot take advantage of the statute.2"

17 Ante, p. 237; In re Garnett, 141 U. S. 1, 11 Sup. Ct. 840, 35 L. Ed. 631.

§ 162. 18 In re Leonard (D. C.) 14 Fed. 53; Warner v. Boyer (D. C.) 74 Fed. 873; S. A. McCaulley (D. C.) 99 Fed. 302; Douse v. Sargent (D. C.) 48 Fed. 695.

19 Craig v. Continental Ins. Co., 141 U. S. 638, 12 Sup. Ct. 97, 35 L. Ed. 886.

20 SCOTLAND, 105 U. S. 24, 26 L. Ed. 1001; Titanic v. Mellor. 233 U. S. 718, 34 Sup. Ct. 754, 58 L. Ed. 1171.

21 Smith v. Booth (D. C.) 110 Fed. 680; Id., 122 Fed. 626, 58 C. C. A. 479; In re Reichert Towing Line, 251 Fed. 214, 163 C. C. A. 370.

1

AGAINST WHAT LIABILITIES LIMITATION MAY BE CLAIMED

163. Under the original act, the only liabilities against which exemption could be pleaded were those over which an admiralty court would have jurisdiction, whether in point of fact they were being asserted in an admiralty court or in a common-law court having concurrent jurisdiction.

But under the amendment of June 26, 1884, the defense was authorized against nonmaritime causes of action also.

The leading decision laying this down as the test under the original act is EX PARTE PHENIX INS. CO.22 In that case a fire had communicated from the vessel to the shore, and had done damage on the shore. It was contended that the vessel owner could limit his liability against such a cause of action as this, and that it came within the language of the statute. The court, however, held that, as a cause of action originating on water, but consummate on land, could not be asserted in an admiralty court, the owner could not claim the benefit of the act, it being a part of the general maritime law, and resting mainly on that law for its validity.23.

As examples of such causes of action, the defense has been sustained against fires on vessels,24 and it may be pleaded not only against loss or damage to property, but also against personal injuries, including those resulting in death; and not only against those injured on the vessel itself which is setting up the exemption, but those also injured upon

§ 163. 22 118 U. S. 610, 7 Sup. Ct. 25, 30 L. Ed. 274.

23 See, also, Goodrich Transp. Co. v. Gagnon (C. C.) 36 Fed. 123. 24 Ante, p. 348.

another vessel by the negligence of the vessel asserting the exemption.25

This includes injuries due to collision.20

Though the test of maritime jurisdiction was applied as to cases under the original act, the Supreme Court has held that the intent of the amendment of June 26, 1884, was to extend the exemption to nonmaritime causes of action as well, whether in contract or tort, in pursuance of the policy of encouraging American shipping."

In this respect the policy of the act differs from that of the Harter Act. It has been seen 28 that the Harter Act is held to regulate only the relations between a shipper and his own ship, and not to affect any rights of action which parties on another ship injured by the offending ship may have.

On the other hand, this act enables the owner to defend himself not only against his own shippers or passengers, but against those on the other vessel as well. The reason for the difference of policy is that the Harter Act works an entire exemption from all liability, whereas this act permits the injured party to subject the owner's interest in the vessel, and merely protects the owner from additional liability beyond the value of his vessel.

The act may be invoked even against unseaworthiness caused by negligent loading, which is another striking difference between it and the Harter Act.29

25 BUTLER v. BOSTON & S. STEAMSHIP CO., 130 U. S. 527, 9 Sup.. Ct. 612, 32 L. Ed. 1017; Albert Dumois, 177 U. S. 240, 20 Sup. Ct. 595, 44 L. Ed. 751; City of Columbus (D. C.) 22 Fed. 460; Amsterdam (D. C.) 23 Fed. 112; Glaholm v. Barker, L. R. 2 Eq. 598; Id., 1 Ch. App. 223.

26 NORWICH & N. Y. TRANSP. CO. v. WRIGHT, 13 Wall. 104, 20 L. Ed. 585; Great Western, 118 U. S. 520, 6 Sup. Ct. 1172, 30 L. Ed. 156.

27 Richardson v. Harmon, 222 U. S. 96, 32 Sup. Ct. 27, 56 L. Ed. 110; Rochester (D. C.) 230 Fed. 519.

28 Ante, p. 183.

29 COLIMA (D. C.) 82 Fed. 665.

It may be pleaded against any wrongful acts of the master; for example, his wrongful sale of the cargo.80

PRIVITY OR KNOWLEDGE OF OWNER

164. In order for the owners to exonerate themselves, the negligent act must have been without their privity or knowledge. This means the personal privity or knowledge of the owners, and not the mere privity or knowledge of their agents; except that in the case of a corporation the privity or knowledge of the president or other high official above the grade of an employé is the privity or knowledge of the corporation, and would defeat the right of the corporation to the exemption.

The question what constitutes privity or knowledge has been the subject of much discussion. It is clear, at the outset, that actual knowledge of the owners would prevent them from claiming the exemption.31

Nor can it be claimed against liabilities which the owners have personally contracted; for instance, supplies ordered by them personally.32

It can be claimed only against those liabilities incurred as owner, not against contracts outside of the regular functions of the vessel owner. For instance, it has been held that it could not be set up against a vessel owner's contract to insure the goods shipped.33

It may be set up even against defects which would be held to constitute unseaworthiness if those defects were not discoverable by the ordinary examination of an unskilled per

30 Giles Loring (D. C.) 48 Fed. 463.

§ 164. 31 In re Meyer (D. C.) 74 Fed. 881.

32 Amos D. Carver (D. C.) 35 Fed. 665; McPhail v. Williams (D. C.) 41 Fed. 61; Gokey v. Fort (D. C.) 44 Fed. 364.

33 Laverty v. Clausen (D. C.) 40 Fed. 542.