CHAPTER VII,

LIMITATION OF LIABILITY.

statutory.

In this country the limitation of shipowners' liability Limitation of depends entirely upon statute. It is said by writers of liability is authority that by the maritime law the shipowner's liability for collision is limited to the value of ship and freight (a). Whether such a rule of the maritime law (b) ever existed, Maritime and it is immaterial here to inquire. No such rule has ever foreign law been recognized by the Courts of this country, either at subject.

upon the

common law or in Admiralty (c). By the municipal laws of Holland, France, and other continental nations, the liability of shipowners not only for the torts but also for the contracts of the master of their ship, has for more than two centuries been limited to the value of the ship and freight (). It is perhaps due to this fact that limited liability has been said to be a principle of the general maritime law. But its origin cannot be traced either to the Roman law or to any of the medieval codes of maritime law. In both these systems it is either clearly implied or expressly stated that the wrong-doer in a collision shall make full compensation (e).

(c) See The Dundee, 1 Hag. Ad. 109, 120; The Carl Johann, referred to 3 Hag. Ad. 186; The Aline, 1 W. Rob. 111; The Volant, ib. 383; The Mellona, 3 W. Rob. 16, 20; The Wild Ranger, Lush. 553, 564; Wilson v. Dickson, 2 B. & Ald. 2; Gale v. Laurie, 5 B. & C. 156, 164; Cope v. Doherty, 4 K. & J. 367, 378; Stoomvaart Maatschappy Nederlands v. Peninsular and Oriental Steam Navigation Co., 7 App. Cas. 795, 814. The dictum of Parke, B., in Brown v. Wilkinson, 15 M. & W. 398, appears to be incorrect.

(d) Emerigon Contr. à la Grosse, ch. 4, s. 11; Boulay-Paty Cours de Droit Commercial Maritime, vol. i., pp. 263-298. See also The Mary Ann, L. R. 1 A. & E. 8, 11; and the articles of foreign codes cited at the foot of this chapter.

(e) As to liability for collision by the Roman law, see Dig. lib. 4, tit. 9; Dig. lib. 44, tit. 7, fr. 5; Dig. lib. 45, tit. 5, fr. 1; 3 Kent's Comm. 218; per Ware, J., in The Phebe, Ware's Rep. 263; Loccentius, c. 8, s. 11.

As to the medieval codes, the Laws of Oleron, Art. 15, clearly assumes that the wrong-doer shall pay full damages-tous ses dommages -tot ses danmatges; see 1 Twiss' Black Book, 108; ibid. vol. ii., pp. 229, 449. So the Consolato del Mare, cap. 155: "E si dan li fa, deulo li tot esmenar e restituar,” but

The language of the codes of Northern Europe is the same: Dat Gotlandsche Water-Recht (the Wisbuy Sea Laws), Art. 29: De schipper is schuldich" myt synen schjpluden to delende den schaden mank sik. The Laws of the Osterlings (Hamburgh Code), Art. 23: unless the master of the ship that does the damage swears that he did it unwittingly, he schal eme gans den schaden beteren; 4 Twiss' Black Book, 373; and in like case by the Gotland Code, Art. 65, so schal hre emo den schaden al hel gelden. And by the Flanders Sea Laws, Art. 15, the master who lays out his anchor so as to damage another ship, si siin dat wel sculdich te beteren; and Art. 31 of the Gotland Code in like case he is schuldich to beterende ; 4 Twiss' Black Book, 88. So the rule as to dividing the loss assumes that, but for it, the ship run down would recover alle die schade (Flanders Code), alle den schaden (Gotland Code, Art. 30, 4 Twiss' Black Book, 88). In the Instructions to the Admiral in the Black Book of the Admiralty, dating circ. 1337—1351 (1 Twiss, 37), the wrong-doer in a collision is to make plaine amende.

commande.

The contract of commande, or joint adventure of ship- It originated owners and merchants, corresponding in some respects to perhaps in the société en commandite, or partnership with limited liability, of modern times, is perhaps the origin of the widespread doctrine of limited liability of shipowners. This kind of association extensively prevailed in the Mediterranean in the Middle Ages, and is frequently mentioned in the Consolato del Mare (ƒ). As regards third parties, it seems that the liability of the shipowner upon contracts entered into by his agent, or committee in such an association, with reference to the ship, was limited to the value of the ship (9).

at the root of

It is not until the beginning of the seventeenth century Protection is that we find protectionist doctrines put forward upon it. So avowed grounds of public policy as a reason for limiting ship- by Grotius. owners' liability. Grotius, writing in the year 1625, says that the principle of limitation of owners' liability upon the contracts of the master prevailed in his day, and for a long time previously had prevailed in Holland (). And he approves the principle as being consonant with natural justice, and necessary for the encouragement of shipping (i). Liability for collision is not expressly noticed, but the policy of protection, which limited liability in the case of his contracts, no doubt applied equally to protect owners from liability for their master's torts. The rule of continental law which limits the shipowner's liability upon his master's contracts, has never been adopted in England;

(f) See 6 Pardessus Lois Maritimes, tit. Commande, Index.

(g) Cf. Consolato del Mare, cap. 244: "Qui la dita nau o leny li haura comanat, los es tengut di tot lo dit dan e greuge a restituir, si la dita nau o leny ne sabia esser Venut, ab que per culpa d'aquell a qui ell haura la dita nau o leny comanet, los sia es devengut lo dit dan o greuge." A similar provision as to the sale of the ship is contained in cap. 209.

(h) De Jure Belli et Pacis, 1. 2, ch. 11, s. 18: "Apud Hollandos ubi mercatura pridem maxime viguit. . . et nunc et olim constitutum ne exercitoriâ etiam universi (exercitores) amplius teneantur quam ad æstimationem navis, et eorum quæ in navi sunt."

(1) "Absterrentur enim homines ab exercendis navibus si metuant ne ex facto magistri quasi in infinitum teneantur": ibid.

Analogy of noxal action -noxe deditio.

Connection between limitation of liability and division of

loss.

Connection between limited

liability and arrest of the ship.

the liability of a shipowner upon contracts entered into by the master as his agent having always been, as it is at the present day, unlimited.

More than one writer () has pointed out the analogy between the law which limits shipowners' liability to the value of ship and the noxal action-noxæ deditio-of the Roman law. The law of deodand has also been thought to be founded on the same idea-that which personifies the inanimate object (7) which does the injury and identifies it with the actual wrong-doer. In the face of the express provisions of the Code of Oleron and other sources of English maritime law, which require the wrong-doer to make full compensation to the sufferer in a collision, there is difficulty in accepting this view as to the origin of limited liability.

The principle of unlimited liability, which seems to have been adopted from the civil law into the medieval codes, was to some extent modified by the rule of division of loss in the case of inevitable accident. And in some of the later codes there are traces of the rule of division of loss being extended to cases of collision by negligence (m). We have seen in a former chapter that the rule as to division of loss was probably applied somewhat loosely, and without much discrimination as to whether the collision was due to negligence or not. In this way losses by collision were doubtless distributed, and the shipowner's liability was in a sense limited; but the recognition of the principle of limitation of liability to the value of ship and freight belongs to a later date.

In the case of damage done by a ship belonging to foreigners resident abroad, and where service of a writ of summons cannot be effected, the damages recoverable are,

(k) See Bynkershoek, Quæst. Jur. Priv. 1. 4, c. 20; Holmes on the Common Law, p. 30.

(1) See above, pp. 75 seq., as to personification of the ship.

(m) See Droit Maritime de la Suède, 3 Pardess. 129, 173, 174; Dantzic Sea Laws, Art. 51, 4 Twiss' Black Book, 349.

in practice, limited to the value of the ship and freight, the res arrested by the Admiralty Court. The statutory limit of liability is doubtless connected with this fact; but the arrest of the ship was adopted, in the first instance, in order to compel her owners to appear, and not because their liability was limited to the value of the ship (n).

legislation

subject.

The history of the singular legislation in this country History of which prevents the sufferer in a collision between ships English from recovering damages beyond a sum fixed by reference upon the to the size of the instrument with which the damage is done, is as follows: Until the year 1734, by the common law of England and by the maritime law as administered in the Admiralty Court of this country, the liability of shipowners for damages by collision was, as has been stated above (0), unlimited. In that year an Act, 7 Geo. II. 7 Geo. II. c. 15, was passed limiting shipowners' liability for loss of cargo by theft of master or crew to the value of the ship and freight (p). This Act was passed in consequence of the decision in Boucher v. Lawson (q), by which the shipowners were held liable for loss of a cargo of bullion taken on board in Portugal and afterwards stolen by the master. The fact that Holland, and other maritime nations of Europe, had previously passed similar laws

(n) The Bold Buccleugh, 7 Moo. P. C. C. 267, 283; and supra, p. 80. The dictum of Parke, B., to the contrary in Brown v. Wilkinson, 15 M. & W. 391, is probably incorrect.

(6) See supra, p. 161, note (a). (p) Sutton v. Mitchell, 1 T. R. 18, is a decision under this Act, that the owners were not liable beyond the statutory limit for a robbery of cargo in which one of the crew was concerned.

(2) Cas. temp. Hardw. 85; see per Buller, J., Yates v. Hall, 1 T. R. 75, 78. Boucher v. Lawson is clearly the case referred to in the petition of shipowners set out in the Journals of the House of Commons, Sess. 1733, p. 277. The

petitioners, after referring to the
decision, complain that they, "when
they became owners of ships, did
not apprehend themselves exposed
to such hazard, or liable as owners
to any greater loss than that of the
ships and freight; and of the in-
supportable and unreasonable hard-
ships to which our laws in this case
subject them; and to which no
owners of ships are exposed in other
trading nations; and they repre-
sent to the House "that, unless
some provision be made for their
relief, trade and navigation will be
greatly discouraged, since owners
of ships find themselves, without
any fault on their part, exposed to
ruin," &c. &c. &c.

c. 15.