Italia Societa Per Azioni Di Navigazione v. Oregon Stevedoring Company, Inc. ( 1962 )

HAMLIN, Circuit Judge.

Appellant, Italia Societa Per Azioni di Navigazione, a shipowner, contracted with the Oregon Stevedoring Company, Inc., appellee herein, for the performance of stevedoring services on appellant’s ship, the M.S. Antonio Pacinotti. On or about November 19, 1958, during the course of stevedoring operations a longshoreman named Griffith, an employee of the stevedoring company, was injured due to a latently defective rope which had been brought onto the ship by the stevedoring company. Griffith recovered a judgment against appellant shipowner which it satisfied. Thereafter, in a separate action appellant shipowner brought suit against appellee stevedor-ing company claiming indemnity from appellee for the amount of the judgment which it had been required to pay Griffith. Appellant based .its claim for indemnity on the ground that the stevedor-ing company had been negligent and had breached its warranty of workmanlike service in supplying the defective rope. The stevedoring contract contained an express warranty whereby the stevedor-ing company undertook to indemnify the shipowner for negligence in the performance of its services.¹ The district court found that the stevedoring company had not been negligent in any way in bringing onto the ship the rope which caused injury to the longshoreman. The district court held that the presence of the express warranty covering negligence precluded any recovery for breach of an implied warranty of workmanlike service, in essence relying on the maxim expressio unius est exelusio alterius (expression of one thing is the exclusion of another). Judgment was entered for the stevedoring company and the shipowner appealed to this court which has jurisdiction pursuant to 28 U.S.C.A. § 1291.

No complaint is made on this appeal of the district court’s finding that the stevedoring company was not negligent. Appellant contends merely that an implied warranty of workmanlike service arose from the contractual relationship between the parties which implied warranty placed a duty upon the stevedoring company to supply proper and seaworthy equipment. It is contended that a failure to supply seaworthy equipment is a breach of the implied warranty of workmanlike service which entitles the shipowner to indemnity for any liability it incurs resulting from the faulty equipment regardless of whether the stevedoring company was negligent in supplying the equipment. Assuming that there is an implied warranty which covers the facts of this case, the appellant shipowner argues that the mere presence of the express clause indemnifying for negligence does not preclude a recovery on the implied warranty. It will be unnecessary to consider the last contention if we determine that the warranty of workmanlike service does not include elements of liability without fault, i. e., that the stevedoring company absent negligence on its part does not warrant the suitability of the equipment which it supplies pursuant to its steve-doring contract.

We address ourselves, then, to the question whether a stevedoring company breaches its implied warranty of workmanlike service, which breach results in indemnity to the shipowner, when it supplies unseaworthy equipment to a ship on which it is to perform stevedoring services even though the stevedoring company has not been negligent in any way.

The leading case on indemnity liability for breach of the implied warranty of workmanlike service is Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133 (1956). In that case a stevedoring company had agreed to perform stevedoring services and one of its employees was injured during the unloading. A jury returned a verdict for the longshoreman against the shipowner. The shipowner had impleaded the stevedoring company claiming that it was entitled to full indemnity because the stevedoring company had negligently failed to stow the cargo in a safe and proper manner which negligence caused the shipowner to be liable to the longshoreman. The informal stevedoring contract made no reference to an express indemnity agreement. After rejecting the contention of the stevedoring company that indemnity was precluded by the provision in the Longshoremen’s and Harbor Workers’ Compensation Act which made a longshoreman’s recovery of compensation his exclusive remedy against his employer,² the Court held that the shipowner was entitled to indemnity based on the stevedoring company’s breach of its implied warranty of workmanlike service.

Prior to Ryan the Court had recognized that a stevedoring company could by contract expressly agree to indemnify the shipowner for any liability to longshoremen occasioned by the fault of the stevedoring company, American Stevedores, Inc. v. Porello, 330 U.S. 446, 67 S. Ct. 847, 91 L.Ed. 1011 (1947). Where the contract did not deal expressly with indemnity such liability arose from the stevedoring company’s obligation to perform its services in a workmanlike manner. The contractual obligation was described as a “warranty of workmanlike service that is comparable to a manufacturer’s warranty of the soundness of its manufactured product.” The warranty “is of the essence of * * * {the] stevedoring contract.” ³ In Ryan the obligation was to stow the cargo “properly and safely” and a breach of the obligation was a breach of the warranty of workmanlike service giving rise to a right in the shipowner of indemnity against the stevedoring company for money which the shipowner became liable to pay to a longshoreman on account of the breach.

Much judicial effort since Ryan has been concerned with defining the nature and scope of a stevedoring company’s implied warranty of workmanlike service. But only one case, Booth S.S. Co. v. Meier & Oelhaf Co., 262 F.2d 310 (2d Cir.1958), has decided that the warranty of workmanlike service includes elements of liability without fault. In the Booth case a contractor who undertook to repair a ship brought some unsea-worthy equipment on board which caused injury to a workman and as a result the shipowner was liable for unseaworthiness. Indemnity was sought from the contractor, but the district court dismissed the third-party claim of the shipowner since there had been no proof that the contractor had been negligent in supplying the equipment. On appeal the parties agreed that neither of them had been negligent, and the court stated that the question was whether the contractor could be liable for indemnity where it had supplied defective equipment without fault. Recognizing that the question had not been decided before, the court, nevertheless, did not believe that the leading cases on indemnity excluded “the existence of liability without fault as an element of the warranty of workmanlike service in appropriate cases.”⁴ After its discussion the court stated:

“[We] hold that if the contractor undertook to do the work of repair of the vessel’s engines, and if he supplied the equipment which failed in the course of the use for which it was supplied, then the failure constituted a breach of the contractor’s implied warranty of workmanlike service and rendered him liable to indemnify the owner for damages paid to the contractor’s employee on account of injuries resulting directly from the failure.” ⁵

Appellant shipowner in the instant ease urges us to follow the Second Circuit’s Booth decision and therefore hold the stevedoring company liable for indemnity for bringing onto the ship a defective rope even though the stevedoring company was not negligent in any way. Appellee stevedoring company argues that some negligence of the stevedoring company is required to constitute a breach of its implied warranty of workmanlike service. Appellee would also have us distinguish Booth from the instant case on the ground that Booth involved a repairman whereas this case involves a stevedoring company. We consider Booth to be indistinguishable from this case on the ground urged or any other. In the context of this case a repairman cannot be distinguished from a stevedoring company. Any distinction in kind is without legal significance. However, we find ourselves in disagreement with the result reached in Booth that non-negligent action can give rise to indemnity liability.⁶ Thus, we refuse to follow the Second Circuit on the point here involved.

It is our belief that the term “warranty of workmanlike service” is not properly susceptible to an interpretation which makes an act done free of negligence and totally without fault the basis of a breach of the warranty. We think the word “workmanlike” means a “proper”, “safe” and “non-negligent” manner of doing something. “Workmanlike” has been defined as “skillful” or “well done” and is said to be synonymous with “deft”, “proficient” or “adept”,⁷ all words which connotate a standard of skill similar to that associated with the reasonable man test for negligence. Cases discussing the legal meaning of “workmanlike” are replete with words and phrases of similar import.⁸

We have scrutinized the leading Supreme Court cases in the field and have found in the Court’s discussion terms the repeated use of which support a conclusion that “workmanlike” describes an ordinary standard of care in the performance of a service the breach of which standard is equivalent to negligence. Thus, in the Ryan case, supra, the Court stated that the stevedoring company’s contractual obligation is to stow the cargo “with reasonable safety,” “properly and safely” and “in a reasonably safe manner”; the liability of the stevedoring company arises from “improper” stowage and the “failure to stow * * * ‘in a reasonably safe manner’ ”; “competency and safety of stowage are inescapable elements of the service undertaken” ; the recovery of the shipowner on his contract may turn upon the “standard of the performance” of the stevedoring service; and the duty of the stevedoring company is to hold the shipowner harmless from “foreseeable damages.”

In Weyerhaeuser S.S. Co. v. Nacirema Operating Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491 (1958), the Court held that it was error to take a case from the jury on the question of indemnity where there was evidence tending to establish negligence on the part of the stevedoring company even though the shipowner had been held liable to the longshoreman only on the basis of negligence and not for unseaworthiness of the vessel.⁹ In Weyerhaeuser much language from Ryan (which is set out above) was utilized, and the Court mentioned that the contractual obligation is to perform duties “with reasonable safety”; the stevedoring company is liable if in using ship’s gear it renders a “sub-standard performance.”

Statements similar to those in Ryan and Weyerhaeuser appear in the three later cases where the Supreme Court has had occasion to discuss the Ryan case and liability for indemnity. Atlantic & Gulf Stevedores, Inc. v. Ellerman Lines, Ltd., 369 U.S. 355, 82 S.Ct. 780, 7 L.Ed. 2d 798 (1962); Waterman S. S. Corp. v. Dugan & McNamara, Inc., 364 U.S. 421, 81 S.Ct. 200, 5 L.Ed.2d 169 (1960); Crumady v. The Joachim Hendrik Fis-ser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed. 413 (1959).

We are not unmindful that negligence liability and warranty liability are not identical. Negligence is a liability in tort while warranty is generally associated with contract liability.¹⁰ Nevertheless, as indicated by the Supreme Court in Ryan the recovery of the shipowner in warranty still may turn upon a standard of performance of the stevedoring service. We believe that in the stevedoring cases the standard of performance is the same whether the ultimate liability be in tort (for negligence) or in contract (for breach of warranty).

Our belief is not altered by the mere fact that there can be no liability of the stevedoring company in tort. In these indemnity cases there is no liability in tort, not because the standard would be different from that of warranty, but rather, because prior to Ryan the Supreme Court had decided that there could be no contribution, based on comparative fault, between shipowner and stevedoring company in respect of seamen’s injuries on the ground that there had been no contribution in the common law between joint tort feasors. Halcyon Lines v. Haenn Ship Ceiling & Refitting Corp., 342 U.S. 282, 72 S.Ct. 277, 96 L. Ed. 318 (1952).¹¹ The entire liability in tort (including liability for unseaworthiness) would rest upon the shipowner since a longshoreman’s right to workmen’s compensation under the Longshoremen’s and Harbor Workers’ Compensation Act is his exclusive remedy against the wrongdoing of his employer, the stevedoring company.¹² This latter legislative reality when juxtaposed on the rule of the Halcyon case, supra, precluded any possibility of liability of the stevedoring company in tort. If the shipowner was to be relieved at all from the onerous burden of Halcyon, liability against the stevedoring company for its wrongs would necessarily have to be predicated upon contract and not tort.¹³ This background to Ryan cannot be separated from an analysis of the liability of the stevedoring company for breach of the implied warranty of workmanlike service. And when this background is kept in mind it seems reasonable to posit that the warranty of workmanlike service was intended only to impose liability in contract similar to that which would otherwise have been imposed in tort (for being negligent in the performance of stevedoring services)- — not that the one (warranty) is the substitute for the other (tort) but that the standard of performance in each case is the same.

The efforts of the shipowner in this case to hold the stevedoring company for action done without fault is an attempt to impose upon the stevedoring company the same degree of liability for unseaworthiness as that which is imposed upon the shipowner. We see no reason in policy or otherwise why the stevedoring company should be liable for unseaworthiness insofar as that doctrine encompasses liability without fault.¹⁴ Liability of the shipowner for unseaworthiness arises where the ship’s gear is not reasonably fit for the purpose for which it is intended. Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 80 S.Ct. 926, 4 L. Ed.2d 941 (1960). The liability extends to longshoremen and other workmen who are injured while performing duties traditionally done by members of the ship’s crew. Seas Shipping Co. v. Sier-acki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099 (1946); Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 74 S.Ct. 202, 98 L. Ed. 143 (1953). And liability is imposed upon the shipowner even where the equipment which causes injury to a longshoreman is brought onto the ship by his employer, the stevedoring company. Alaska S.S. Co. v. Petterson, 347 U.S. 396, 74 S.Ct. 601, 98 L.Ed. 798 (1954). Just as the longshoreman is entitled to the warranty of seaworthiness while performing duties traditionally done by the ship’s crew, the liability imposed with respect to equipment brought on board by the stevedoring company or other contractor would seem to rest upon the similar proposition that the gear was traditionally that which belonged to the ship. But the liability for unseaworthiness is the shipowner’s not the stevedoring company’s. The liability is absolute and non-delegable. Mitchell v. Trawler Racer, Inc., supra; Seas Shipping Co. v. Sieracki, supra; Mahnich v. Southern S. S. Co., 321 U.S. 96, 64 S.Ct. 455, 88 L.Ed. 561 (1944).

The Supreme Court has recognized that the respective duties of the stevedoring company and the shipowner to the longshoreman rest upon different principles than do their liabilities with respect to each other.¹⁵ In view of this factor there would seem to be no necessary reason why a shipowner could not be liable without the stevedoring company always being liable at the same time to the shipowner. The shipowner is liable to the longshoreman for negligence and unseaworthiness and the stevedoring company is liable to the longshoreman for workmen’s compensation, but this is not to say that as between the two the stevedoring company is liable to the same extent and upon the same basis as the shipowner. The stevedoring company’s liability arises only from its contractual arrangement with the shipowner.¹⁶ We believe the stevedoring company’s warranty of workmanlike service is only breached (giving rise to indemnity) where it has rendered a substandard, negligent performance. Such negligence on the part of the stevedoring company can of course give rise to unseaworthiness liability of the shipowner and in that situation there would be indemnity.¹⁷ But we believe indemnity liability cannot arise from non-negligent actions done entirely without fault. The liability of the shipowner to the longshoreman for unseaworthiness arises from a policy to protect the longshoreman at the expense of the shipowner who presumably is better able to shoulder the risk of loss. No doubt this policy in part received impetus from the historical dogma that seamen are the wards of the admiralty court. But the stevedoring company is not liable for unseaworthiness, and we can see no policy comparable to that which gives rise to the shipowner’s liability which would compel an indemnity in favor of the shipowner where the stevedoring company has not been negligent.

We do not believe the Supreme Court’s characterization of the warranty of workmanlike service as being “comparable to a manufacturer’s warranty of the soundness of its manufactured product” ¹⁸ precludes the result reached in this case. It must be recognized that the warranty of workmanlike service is in some sense different from the manufacturer’s warranty in that the former involves the performance of a service— unloading of vessels — while the latter attaches to a product that is made. Moreover, although some warranties result in strict liability of the manufacturer, certainly not all of them do.¹⁹ We think a fair interpretation of all the language used in the leading cases (and the results reached in the plethora of other cases) is that the stevedoring companies are not liable for breach of the warranty of workmanlike service in the absence of some negligence.

We realize that stevedoring companies and shipowners enjoy considerable freedom of contract with respect to liability for indemnity, and we have no doubt that agreements could be made to cover expressly the action which we have said does not come within the implied warranty of workmanlike service. American Stevedores, Inc. v. Porello, 330 U.S. 446, 67 S.Ct. 847 (1947).

In view of our decision that the warranty of workmanlike service could not have been breached without some negligence on the part of the stevedoring company (i. e., that there was no implied warranty covering liability without fault), we find it unnecessary to decide whether the district court was correct in holding that the presence of the express contract clause indemnifying for negligence precluded any implied warranty.

Judgment affirmed.

1 . The express indemnity clause read:

The Stevedoring Company will be responsible for damage to the ship and its equipment, and for damage to cargo or loss of cargo overside, and for injury or death of any person caused by its negligence, provided, however, when such damage occurs to the ship or its equipment, or where such damage or loss occurs to cargo, the ship’s officers or other authorized representatives call the same to the attention of the Stevedoring Company at the time of occurrence. The Steamship Company shall be responsible for injury to or death of any person or for damage to or loss of property arising through the negligence of the Steamship Company or any of its agents or employees, or by reason of the failure of ship’s gear and/or equipment.

2 . Longshoremen’s and Harbor Workers’ Compeusation Act, § 5, 33 U.S.C.A. § 905.

3 . 350 U.S. at 133-134, 76 S.Ct. at 237.

4 . 262 F.2d at 313. The court did not intimate what it meant by “appropriate cases”.

5 . 262 F.2d at 314-315.

6 . The Court in Booth felt that it was not unreasonable to require the supplier of equipment to test and inspect the materials “the omission of which would not constitute negligence.” (262 F.2d at 314.) However, what the court was articulating was a basis for strict liability without fault and it would seem that discussion of a burden to make tests the omission of which would not be negligence is inappropriate for the reason that standards of conduct and of performance are irrelevant where strict liability is imposed. Strict liability doesn’t depend on what one does or does not do according to any set standard of care. The court’s discussion would seem, rather, to be no more than an attempt to state a justification for risk-shifting from one party to another.

7 . Webster’s New International Dictionary 2952 (2d ed. unabridged) (“workmanlike”) .

8 . See cases cited in 18A Words & Phrases 22 (“Good and Workmanlike Job”) and 45 Words & Phrases 520 (“Workmanlike manner”) (permanent ed.).

9 . The court recognized that at some point activity on the part of the shipowner would preclude its recovery of indemnity from the stevedoring company even though the stevedoring company might also be negligent in some respect. 355 U.S. at 567-568, 78 S.Ct. 438.

10 . In recent history liability for breach of warranty has been associated with contract more than anything else. See Harper & James, Torts § 28.16 (1956) and Prosser, Torts § 84 (2d ed. 1955). But there is support for the proposition that warranty was originally a tort liability. Prosser, Torts 507 (2d ed. 1955). Increasingly, warranty is becoming a liability apart from tort perhaps because much of it does not necessarily depend on fault or the adherence to a standard of care; and warranty is drifting away from contract probably because many who are entitled to a recovery in warranty have no contractual relationship with the person from whom they seek to recover. Concepts of privity of contract are ever more gradually giving way to sweeping coverage of warranty. See Prosser, The Assault Upon the Citadel (Strict Liability to tbo Consumer), 69 Yale L.J. 1099 (1960). While the precise nature of warranty may in general be disputable, it is clear that the warranty of workmanlike service of a stevedoring company arises from contract. Of late, however, the importance of a contract between stevedoring company and shipowner (or ship in the case of a libel in rem) has been undermined; its presence is no longer a necessary condition to an indemnity based upon an implied warranty of workmanlike service. Waterman S.S. Corp. v. Dugan & McNamara, Inc., 364 U.S. 421, 81 S.Ct. 200 (1960); Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 445 (1959). In Waterman and Crumady the shipowner was allowed to recover for breach of warranty even though there was no direct contract relationship between him and the stevedoring company. However, the contract idea was adhered to since the ship or shipowner were considered to be the third-party beneficiaries of the contract between the stevedoring company and the one who contracted for its services.

11 . In Halcyon a shipowner was sued by a longshoreman and the shipowner im-pleaded the employer stevedoring company. A jury determined that the shipowner had been 25% responsible for the longshoreman’s injuries and that the stevedoring company had been 75% responsible. The district court equally divided the damages analogizing to collision cases. The Supreme Court held that there could be no contribution which led to the result that shipowner who was only 25% responsible was liable for the whole while the 75% responsible steve-doring company was not liable at all.

12 . See note 2 supra.

13 . See Gilmore & Black, Admiralty 366-374 (1957).

14 . Whether a particular set of facts gives rise to an action for negligence alone, for unseaworthiness alone or for both negligence and unseaworthiness is often an extremely difficult question. It has become quite evident that there is a very minute area, if any, which is negligence but not at the same time unseaworthiness. The continued existence of such an area is largely theoretical. The unseaworthy whale has all but swallowed the negligent Jonah. See generally Gilmore & Black, Admiralty §§ 6-34 — 6-44 (1957) and Tetreault, Seamen, Seaworthiness and the Rights of Harbor Workers, 39 Cornell L.Q. 381 (1954).

15 . See Weyerhaeuser S.S. Co. v. Nacirema Operating Co., 355 U.S. 563, 568, 79 S. Ct. 438 (1958) and Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 134, 76 S.Ct. 232 (1956).

16 . But see note 10 supra in connection with Waterman S.S. Corp. v. Dugan & McNamara, Inc., 364 U.S. 421, 81 S.Ct. 200 (1960) and Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 455 (1959).

17 . E. g., Crumady v. The Joachim Hendrik Fisser, supra note 16.

18 . Ryan Stevedoring Co. v. Pan-Atlantic S.S. Corp., 350 U.S. 124, 133-134, 76 S.Ct. 232, 237 (1956).

19 . See generally Prosser, The Assault Upon the Citadel (Strict Liability to the Consumer), 69 Yale L.J. 1099 (1960).