decided: November 21, 1960.
WATERMAN STEAMSHIP CORP
DUGAN & MCNAMARA, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT.
Warren, Black, Frankfurter, Douglas, Clark, Harlan, Brennan, Whittaker, Stewart
[ 364 U.S. Page 421]
MR. JUSTICE STEWART delivered the opinion of the Court.
The petitioner is the owner of the vessel S. S. Afoundria. The respondent is a stevedoring company. A longshoreman employed by the respondent was injured aboard the
[ 364 U.S. Page 422]
between them. The Court of Appeals for the Third Circuit affirmed in an en banc decision, three judges dissenting.*fn2 Certiorari was granted to consider whether in a situation such as this the absence of a contractual relationship between the parties is fatal to the indemnity claim. 362 U.S. 926.
In Ryan Co. v. Pan-Atlantic Corp., 350 U.S. 124, it was established that a stevedoring contractor who enters into a service agreement with a shipowner is liable to indemnify the owner for damages sustained as a result of the stevedore's breach of his warranty to perform the obligations of the contract with reasonable safety. This warranty of workmanlike service extends to the handling of cargo, as in Ryan, as well as to the use of equipment incidental to cargo handling, as in Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563. The warranty may be breached when the stevedore's negligence does no more than call into play the vessel's unseaworthiness. Crumady v. The J. H. Fisser, 358 U.S. 423, 429. The factual allegations of the third-party complaint in the present case comprehend the latter situation.
In the Ryan and Weyerhaeuser cases considerable emphasis was placed upon the direct contractual relationship between the shipowner and the stevedore. If those decisions stood alone, it might well be thought an open question whether such contractual privity is essential to support the stevedore's duty to indemnify. But the fact is that this bridge was crossed in the Crumady case. There we explicitly held that the stevedore's assumption of responsibility for the shipowner's damages resulting from unsafe and improper performance of the stevedoring services was unaffected by the fact that the shipowner was not the party who had hired the stevedore. That case was decided upon the factual premises that the stevedore
[ 364 U.S. Page 424]
had been engaged not by the shipowner, but by the party operating the ship under a charter. The Court's language was unambiguous:
"We think this case is governed by the principle announced in the Ryan case. The warranty which a stevedore owes when he goes aboard a vessel to perform services is plainly for the benefit of the vessel whether the vessel's owners are parties to the contract or not. That is enough to bring the vessel into the zone of modern law that recognizes rights in third-party beneficiaries. Restatement, Law of Contracts, § 133. Moreover, as we said in the Ryan case, 'competency and safety of stowage are inescapable elements of the service undertaken.' 350 U.S., at 133. They are part of the stevedore's 'warranty of workmanlike service that is comparable to a manufacturer's warranty of the soundness of its manufactured product.' Id., at 133-134. See MacPherson v. Buick Motor Co., 217 N. Y. 382, 111 N. E. 1050.
"We conclude that since the negligence of the stevedores, which brought the unseaworthiness of the vessel into play, amounted to a breach of the warranty of workmanlike service, the vessel may recover over." 358 U.S. 428-429.
This reasoning is applicable here. We can perceive no difference in principle, so far as the stevedore's duty to indemnify the shipowner is concerned, whether the stevedore is engaged by an operator to whom the owner has chartered the vessel or by the consignee of the cargo. Nor can there be any significant distinction in this respect whether the longshoreman's original claim was asserted in an in rem or an in personam proceeding. In the Ryan and Weyerhaeuser cases in personam liability was asserted. In the Crumady case the injured stevedore had brought an in rem proceeding. The ship and its owner
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are equally liable for a breach by the contractor of the owner's non-delegable duty to provide a seaworthy vessel. The Osceola, 189 U.S. 158, 175; cf. Continental Grain Co. v. Barge FBL-585, 364 U.S. 19. The owner, no less than the ship, is the beneficiary of the stevedore's warranty of workmanlike service.
Accordingly the judgment of the Court of Appeals is reversed, and the case is remanded to the District Court for further proceedings consistent with this opinion.
Reversed and remanded.
272 F.2d 823, reversed.