KOSSICK v. UNITED FRUIT CO.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.
Argued February 20, 1961.
Decided April 17, 1961.
In a diversity-of-citizenship suit in a Federal District Court in New York by petitioner, a seaman, against respondent, a shipowner, the complaint alleged that: While a member of the crew of respondent's vessel, petitioner suffered an ailment which was not attributable to any fault of respondent but which entitled him to maintenance and cure; he requested private treatment at respondent's expense; this was denied, but respondent promised that, if petitioner would accept treatment at a Public Health Service Hospital, respondent would assume responsibility for all consequences of improper or inadequate treatment; petitioner did so and suffered injury as a result of improper treatment. The District Court dismissed the complaint, because it failed to allege that the agreement was in writing and such a verbal agreement is void under the New York Statute of Frauds. Held: It was error to apply the New York Statute of Frauds to bar proof of the agreement alleged in the complaint. Pp. 731-742.
Jacob Rassner argued the cause and filed a brief for petitioner.
Eugene Underwood argued the cause for respondent. With him on the brief was Frank I. Fallon.
MR. JUSTICE HARLAN delivered the opinion of the Court.
This case calls in question the propriety of a dismissal before trial of the first cause of action in a seaman's diversity complaint. Dismissal was on the ground that [365 U.S. 731, 732] the allegations of the complaint are deficient by reason of the New York Statute of Frauds.
The allegations of the complaint, which for present purposes must be taken as true, are in substance as follows: Petitioner, while employed as chief steward on one of the vessels of respondent, United Fruit Company, suffered a thyroid ailment, not attributable to any fault of the respondent, but with respect to which it concededly had a legal duty to provide him with maintenance and cure. (The Osceola, 189 U.S. 158 .) Respondent insisted that petitioner undergo treatment at a United States Public Health Service Hospital. Petitioner, however, considering on the basis of past experience that such treatment would prove unsatisfactory and inadequate, notified respondent that he wished to be treated by a private physician who had agreed to take care of him for $350, which amount petitioner insisted would be payable by the respondent in fulfillment of its obligation for maintenance and cure.
Respondent, the complaint continues, declined to accede to this course, but agreed that if petitioner would enter a Public Health Service Hospital (where he would receive free care) it would assume responsibility for all consequences of improper or inadequate treatment. Relying on that undertaking, and being unable himself to defray the cost of private treatment, petitioner underwent treatment at a Public Health Service Hospital. The Public Health Service Hospital and private physician alluded to were both located in New York.
Finally, it is alleged that by reason of the improper treatment received at such hospital, petitioner suffered grievous unwonted bodily injury, for which the respondent, because of its undertaking, is liable to the petitioner for damages in the amount of $250,000. 1 [365 U.S. 731, 733]
The District Court dismissed the complaint, considering that the agreement sued on was void under the New York Statute of Frauds, N. Y. Personal Property Law, 31, par. 2, 2 there being no allegation that such agreement was evidenced by any writing, 166 F. Supp. 571. 3 The Court of Appeals affirmed. 275 F.2d 500. We brought the case here because it presented novel questions as to the interplay of state and maritime law. 363 U.S. 838 .
At the outset, we think it clear that the lower courts were correct in regarding the sufficiency of this complaint as depending entirely upon its averments respecting respondent's alleged agreement with petitioner. Liability here certainly cannot be founded on principles of respondeat superior. Nor is there anything in the authorities relating to a shipowner's duty to provide maintenance and cure which suggests that respondent was obliged, as a matter of law, to honor petitioner's preference for private treatment, or that it was responsible for the quality of petitioner's treatment at other hands which, for all that appears, may reasonably have been assumed to be well trained and careful.
With respect to respondent's alleged agreed undertaking, as the case comes to us, petitioner, on the one hand, does not deny the contract's invalidity under the New [365 U.S. 731, 734] York Statute of Frauds, if state law controls, nor; on the other hand, can its validity well be doubted, though the alleged agreement was not reduced to writing, if maritime law controls. For it is an established rule of ancient respectability that oral contracts are generally regarded as valid by maritime law. 4 In this posture of things two [365 U.S. 731, 735] questions must be decided: First, was this alleged contract a maritime one? Second, if so, was it nevertheless of such a "local" nature that its validity should be judged by state law?
The boundaries of admiralty jurisdiction over contracts - as opposed to torts or crimes - being conceptual rather than spatial, have always been difficult to draw. Precedent and usage are helpful insofar as they exclude or include certain common types of contract: a contract to repair, Endner v. Greco, 3 F. 411, or to insure a ship, Insurance Co. v. Dunham, 11 Wall. 1, is maritime, but a contract to build a ship is not. People's Ferry Co. v. Beers, 20 How. 393. Without doubt a contract for hire either of a ship or of the sailors and officers to man her is within the admiralty jurisdiction. 1 Benedict, Admiralty, 366. A suit on a bond covering cargo on general average is governed by admiralty law, Cie Francaise de Navigation v. Bonnasse, 19 F.2d 777, while an agreement to pay damages for another's breach of a maritime charter is not, Pacific Surety Co. v. Leatham & Smith T. & W. Co., 151 F. 440. The closest analogy we have found to the case at hand is a contract for hospital services rendered an injured seaman in satisfaction of a shipowner's liability for maintenance and cure, which has been held to be a maritime [365 U.S. 731, 736] contract. Methodist Episcopal Hospital v. Pacific Transport Co., 3 F.2d 508. The principle by reference to which the cases are supposed to fall on one side of the line or the other is an exceedingly broad one. "The only question is whether the transaction relates to ships and vessels, masters and mariners, as the agents of commerce . . . ." I Benedict, Admiralty, 131. 5
The Court of Appeals here held:
No matter how skeptical one may be that such a burden of proof could be sustained, or that an indigent seaman would be likely to risk losing his rights to free treatment on the chance of sustaining that burden, since we should not exclude that possibility as a matter of law as the Court of Appeals apparently did, it must follow that the contract [365 U.S. 731, 738] here alleged should be regarded as an agreement on the part of petitioner to forego a course of treatment which might have involved respondent in some additional expense, in return for respondent's promise to make petitioner whole for any consequences of what appeared to it at the time as the cheaper alternative. In other words, the consideration for respondent's alleged promise was petitioner's good faith forbearance to press what he considered - perhaps erroneously - to be the full extent of his maritime right to maintenance and cure. Compare, American Law Institute, Restatement, Contracts 75, 76. So viewed, we think that the alleged agreement was sufficiently related to peculiarly maritime concerns as not to put it, without more, beyond the pale of admiralty law.
This brings us, then, to the remaining, and what we believe is the controlling, question: whether the alleged contract, though maritime, is "maritime and local," Western Fuel Co. v. Garcia, 257 U.S. 233, 242 , in the sense that the application of state law would not disturb the uniformity of maritime law, Southern Pacific Co. v. Jensen, 244 U.S. 205 .
Although the doctrines of the uniformity and supremacy of the maritime law have been vigorously criticized - see Southern Pacific Co. v. Jensen, supra, at 218 (dissenting opinion); Standard Dredging Co. v. Murphy, 319 U.S. 306, 309 - the qualifications and exceptions which this Court has built up to that imperative doctrine have not been considered notably more adequate. See Gilmore and Black, Admiralty, passim; Currie, Federalism and the Admiralty: "The Devil's Own Mess," 1960, The Supreme Court Review, 158; The Application of State Survival Statutes in Maritime Causes, 60 Col. L. Rev. 534. Perhaps the most often heard criticism of the supremacy doctrine [365 U.S. 731, 739] is this: the fact that maritime law is - in a special sense at least, Romero v. International Terminal Co., 358 U.S. 354 - federal law and therefore supreme by virtue of Article VI of the Constitution, carries with it the implication that wherever a maritime interest is involved, no matter how slight or marginal, it must displace a local interest, no matter how pressing and significant. But the process is surely rather one of accommodation, entirely familiar in many areas of overlapping state and federal concern, or a process somewhat analogous to the normal conflict of laws situation where two sovereignties assert divergent interests in a transaction as to which both have some concern. Surely the claim of federal supremacy is adequately served by the availability of a federal forum in the first instance and of review in this Court to provide assurance that the federal interest is correctly assessed and accorded due weight.
Thus, for instance, it blinks at reality to assert that because a longshoreman, living ashore and employed ashore by shoreside employers, performs seaman's work, the State with these contacts must lose all concern for the longshoreman's status and well-being. In allowing state wrongful death statutes, The Tungus v. Skovgaard, 358 U.S. 588 ; The Hamilton, 207 U.S. 398 , and state survival of actions statutes, Just v. Chambers, 312 U.S. 383 , respectively, to grant and to preserve a cause of action based ultimately on a wrong committed within the admiralty jurisdiction and defined by admiralty law, this Court has attempted an accommodation between a liability dependent primarily upon the breach of a maritime duty and state rules governing the extent of recovery for such breach. Since the chance of death foreclosing recovery is necessarily a fortuitous matter, and since the recovery afforded the disabled victim of an accident need be no less than that afforded to his family should he die, the intrusion of these state remedial systems need not [365 U.S. 731, 740] bring with it any undesirable disuniformity in the scheme of maritime law.
Altogether analogous reasoning was used by Mr. Justice Brandeis in Red Cross Line v. Atlantic Fruit Co., 264 U.S. 109 , where it was held that a New York court could properly compel arbitration under the arbitration clause of a maritime contract. It was there reasoned that since such clauses are valid in admiralty and their breach gives rise to an action for damages, to compel arbitration is really to do no more than substitute a different and more effective remedy for that available in admiralty.
The line of cases descended from the early precedent of Cooley v. Board of Wardens, 12 How. 299, and most recently added to by Huron Portland Cement v. Detroit, 362 U.S. 440 ; see also Kelly v. Washington, 302 U.S. 1 , exemplify but another variation of this process of accommodation. In the Huron case we allowed the City of Detroit to impose the requirements of its smoke control regulations on vessels coming to the city, even though they had measured up to federally imposed standards as to ship's boilers and equipment. There the matter was put thus:
In sum, were contracts of the kind alleged in this complaint known to be a normal phenomenon in maritime affairs, we think that there would be little room for argument in favor of allowing local law to control their validity. A different conclusion should not be reached either because such a contract may be thought to be a rarity, or because of any suspicion that this complaint may have been contrived to serve ulterior purposes. Cf. 275 F.2d, at 501; 166 F. Supp., at 573-574, note 1, supra. Without remotely intimating any view upon the merits of petitioner's claim, we conclude that it was error to apply the New York Statute of Frauds to bar proof of the agreement alleged in the complaint.
[ Footnote 2 ] New York Personal Property Law, 31, par. 2, provides:
[ Footnote 3 ] A second cause of action for maintenance and cure was subsequently discontinued by petitioner, 275 F.2d, at 502.
[ Footnote 4 ] Although the question has not often been litigated, Union Fish Co. v. Erickson, 248 U.S. 308 ; see United States Fidelity & Guaranty Co. v. American-Hawaiian S. S. Co., 280 F. 1023; Hastorf v. Long-W. G. Broadhurst Co., 239 F. 852; Quirk v. Clinton, 20 Fed. Cas. No. 11,518; Northern Star S. S. Co. v. Kansas Milling Co., 75 F. Supp. 534, it is well accepted that maritime contracts do not as a generality depend on writing for their validity. As Judge Hough, one of the most distinguished of the federal admiralty judges, once said:
[ Footnote 5 ] Benedict goes on to quote from an anonymous commentary on the Mediaeval Statutes of Culm, one of the early sources of maritime law, that anything pertaining to navigation or seamen is to be considered a part of the maritime law.
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE STEWART joins, dissenting.
Certainly no decision in the Court's history has been the progenitor of more lasting dissatisfaction and disharmony within a particular area of the law than Southern Pacific Co. v. Jensen, 244 U.S. 205 . The mischief it has caused was due to the uncritical application of the loose doctrine of observing "the very uniformity [365 U.S. 731, 743] in respect to maritime matters which the Constitution was designed to establish." Southern Pacific Co. v. Jensen, supra, at 217. The looser a legal doctrine, like that of the duty to observe "the uniformity of maritime law," the more incumbent it is upon the judiciary to apply it with well-defined concreteness. It can fairly be said that the Jensen decision has not been treated as a favored doctrine. Quite the contrary. It has been steadily narrowed in application, as is strikingly illustrated by such a tour de force as our decision in Davis v. Department of Labor, 317 U.S. 249 .
The Court today, relying as it does on Jensen, reinvigorates that "ill-starred decision." Davis v. Department of Labor, supra, at 259 (concurring opinion). The notion that if such a limited and essentially local transaction as the contract here in issue were allowed to be governed by a local statute of frauds it would "disturb the uniformity of maritime law" is, I respectfully submit, too abstract and doctrinaire a view of the true demands of maritime law. I would affirm the judgment below.
MR. JUSTICE WHITTAKER, dissenting.
Like the Court of Appeals, 275 F.2d 500, I think the oral contract here claimed by petitioner was not a maritime but a New York contract and barred by its statute of frauds. New York Personal Property Law, 31, par. 2. I therefore dissent. [365 U.S. 731, 744]