Matter of Heaney v. Carlin Construction Co. , 269 N.Y. 93 ( 1935 )

In September of 1932 the P.J. Carlin Construction Company, of 405 Madison avenue, New York city, had a contract with the city of New York for the construction work on Riker's Island, State of New York. The island is owned by the city of New York and used for a penal institution — a penitentiary — and the building operations consisted of the erecting and equipping another penitentiary building and a power house. The island was a mile or two from the shore, the municipality running a ferry which was used almost entirely for transporting prisoners. It was necessary for the Carlin Company to provide transportation facilities for its workmen, as its contract contained this provision: "Each Contractor shall investigate the existing means of transportation to and from Rikers Island. The City shall not be held responsible for providing regular ferry service. The Contractor must assume responsibility for the transportation from Mainland to island of men and materials for all work done under this contract."

The Carlin Company made arrangements with one George I. Forsythe, the owner of a steamboat, for this transportation. The steamer was called the Observation and was capable of carrying two hundred and fifty passengers. It was not used exclusively for Carlin's men. Carlin's arrangement with Forsythe was embodied in a letter, June 26, 1931, and orally accepted by Captain Forsythe. In part it reads as follows: "You are to operate the Steamer `Observation,' which is warranted by you to be officially rated at 250 capacity by local steamboat inspectors, Custom House, N.Y., full crewed, full covered with adequate public liability and workmen's compensation insurance, upon a schedule furnished to you by our Field Office, and calling for operation five days in the week only, from Monday to Friday inclusive.

"You are to be compensated therefor by collecting fares from the men at the rate of 10c a round trip. In the event that your fares do not reach the sum of $60.00 upon any given day, we shall reimburse you for the difference. * * *

"We understand that your boat is warranted to be in first class condition, with all necessary permits to operate in this service."

The claimant Edward Heaney, who resided in the city of New York, was one of Carlin's workmen, and on the 9th day of September, 1932, boarded the steamboat Observation at One Hundred and Thirty-sixth street for the purpose of going to work on Riker's Island. While the steamboat was in operation and en route to the island, there was a terrific explosion — it was blown to bits, many passengers losing their lives, and this claimant, with others, being injured.

An award has been made to Heaney under the Workmen's Compensation Law of this State which has been unanimously affirmed by the Appellate Division, an appeal being allowed by this court. The Commission made this finding: "At the time Edward Heaney sustained the accidental injuries herein above referred to, the status of the claimant and the employer herein was a matter of local concern, was subject to the regulation of the State and in no way worked prejudice to any characteristic feature of the General Maritime Law." Although this is stated as a finding of fact it is a conclusion of law drawn from the facts, with which we cannot agree.

That the explosion of a passenger steamer while in operation upon the seas, or, to be more exact, the East river as it opens into Long Island sound, was a maritime matter or maritime tort is self evident. That Heaney would have an action in admiralty against the steamer for any negligence causing the explosion or for any unseaworthiness must be admitted. Such action would also lie in admiralty or at common law against the owner. Although most of the cases in the books deal with sailors or workmen on ships, maritime law applies as well to passengers. (1 Benedict on Admiralty [5th ed.], pp. 99, 100; The Moses Taylor, 71 U.S. [4 Wall.] 411; Chicago D. G.B. Transit Co. v. Moore, 259 Fed. Rep. 490; certiorari denied, 251 U.S. 553.) To determine, therefore, whether the explosion of a passenger steamer at sea is a matter of local concern so that the application of our Workmen's Compensation Law will not prejudice the characteristic features of the maritime law or its uniformity of application, we must start with this conceded fact: that Heaney was injured in a maritime tort and, if there be negligence, has a cause of action against the ship or the owner in admiralty. In other words, if there be any wrong or any cause of action, admiralty has jurisdiction of it, preserving to the States any common law remedy, which of course does not include the Workmen's Compensation Law. (Southern Pacific Co. v. Jensen, 244 U.S. 205; Knickerbocker Ice Co. v. Stewart,253 U.S. 149.)

What is the effect of our Workmen's Compensation Law upon the remedy in admiralty? By section 29 of our Workmen's Compensation Law when the employee accepts compensation his cause of action is assigned to the insurance carrier. This is a modification of all rights existing at common law. No tort action could be assigned. But we go further, for the cause of action which passes to the insurance company is prosecuted not on the basis of subrogation solely, but for the benefit of the insurance carrier. (Tracy v.American Mutual Liability Ins. Co., 266 N.Y. 536, decided January 24, 1935; cf. Zurich G.A. L. Ins. Co. v. ChildsCo., 253 N.Y. 324, 329; Travelers Ins. Co. v. Brass GoodsMfg. Co., 239 N.Y. 273.)

A new cause of action is also created by the New York statute which never before existed either at common law or in admiralty. By section 15 it is provided that the insurance carrier shall pay the sum of one thousand dollars into certain special funds in every case in which the person killed through negligence shall have left no person entitled to compensation. For this amount thus paid the insurance carrier is given a cause of action against the negligent third party. We held in Phoenix Ind. Co. v. Staten Island R.T. Ry. Co. (251 N.Y. 127) that the same result followed when the widow or next of kin settled with the third party for more than would have been paid under the Workmen's Compensation Law. In such a case the insurance carrier may recover from the third party an additional one thousand dollars which he has been obliged to pay into the State treasury.

Admiralty recognizes no such causes of action. They are peculiar to New York State and may vary with the enactments of every State Legislature. True, these provisions are not applicable here for the reason that Heaney is alive, not dead, but we are dealing with the application or the possible application of the Workmen's Compensation Law to an admiralty tort wherein a passenger on a steamer has been injured or killed. The very nature of the remedy provided by this State legislation shows on its face that it seeks to supplement or add to the admiralty law when a cause of action assigned to an insurance carrier is attempted to be prosecuted in admiralty. InTravelers' Ins. Co. v. Prince Line, Ltd. (262 Fed. Rep. 841), a District Court decision, MAYER, J., held that admiralty would not recognize the assignability of a tort action, and that our Workmen's Compensation Law did not apply to admiralty torts. InKnickerbocker Ice Co. v. Stewart (253 U.S. 149) it was held that the provisions of section 9 of the Judiciary Act of 1789 (1 U.S. Stat. 76, 77) granting to the United States District Courts exclusive original cognizance of all civil causes of admiralty and maritime jurisdiction, saving to suitors in all cases the right of a common law remedy, referred to remedies for the enforcement of the Federal maritime law. It conferred no substantive rights and did not authorize the States so to do. Our Workmen's Compensation Law does confer substantive rights. It gives to the insurance carrier a right to recover full damages when it has only paid out part, and also to recover on an entirely new cause of action for moneys contributed to State funds.

Whether Heaney has a cause of action for negligence in admiralty is beside the point. This all depends upon evidence as to the nature of the explosion. The fact remains that the explosion on this ship at sea was a matter of maritime jurisdiction, the common law remedies being preserved. Heaney has no claim, therefore, under the Workmen's Compensation Law of the State.

The United States Supreme Court, in Spencer Kellogg Sons,Inc., v. Hicks (285 U.S. 502), had a case similar in facts and in my judgment exactly the same in principle. In that case the employer chartered the ship and it was held that his workmen, while being transported on navigable waters, should receive an award in admiralty but no award under the State compensation law. Like Heaney here, these employees were passengers. The fact that the employer in that case was the charterer or owner of the boat, became important and was emphasized by reason of an application made by it to limit liability to the value of the boat as permitted under Federal statute. It had nothing to do with shifting or changing the principle that passengers being transported at sea or on navigable waters by a steamer are subject to admiralty jurisdiction. The court said: "Kellogg Sons undertook the interstate carriage of passengers by water on a launch operated by its servants. This was a maritime matter. The ferriage was for the facilitation of the company's business and for its convenience as well as that of the employees. The injury to the passengers resulted from negligence of the company's agents in the navigation of the launch. It was a maritime tort. The rights and obligations of the parties depended on and arose out of the maritime law. A proceeding to impose liability for such a tort is a cause in admiralty within the meaning of Article III, Sec. 2 of the Constitution, triable in the United States courts sitting in admiralty" (p. 512).

If the rights and obligations of Heaney and Forsythe, the owner of the Observation which blew up, depend upon and arise out of the maritime law, what becomes of those provisions of our State law which assign Heaney's cause of action to an insurance carrier and may in a proper case give the insurance carrier a claim against Forsythe for a thousand dollars contribution to a State fund? Heaney's remedy is solely in admiralty or at common law as our Workmen's Compensation Law does not apply to this unfortunate occurrence.

The authorities relied upon by the respondents, such asMillers' Ind. Underwriters v. Braud (270 U.S. 59); SultanRy. T. Co. v. Dept. of Labor Industries (277 U.S. 135), and State Industrial Board v. Terry Tench Co., Inc. (273 U.S. 639 [240 N.Y. 292]), are not applicable as the work out of which the injury grew in those cases was so closely identified with the land that it had very little to do with transportation on navigable waters or with the safety or operation of ships. Admiralty, on the other hand, has always been solicitous of the seaworthiness and proper equipment of passenger craft both in behalf of passenger and seaman.

Since writing the above there has come to my attention the case of Kenward v. The "Admiral Peoples" (295 U.S. 649), decided June 3, 1935, by the United States Supreme Court, in which the Chief Justice wrote the opinion. A passenger on a steamboat while disembarking at Portland was injured by falling from a gangplank leading from the vessel to the dock. The vessel was liable, and the question of jurisdiction arose. The Chief Justice said: "This is one of the border cases involving the close distinctions which from time to time are necessary in applying the principles governing the admiralty jurisdiction. That jurisdiction in cases of tort depends upon the locality of the injury. It does not extend to injuries caused by a vessel to persons or property on the land. Where the cause of action arises upon the land, the state law is applicable" (citing cases).

"The basic fact in the instant case is that the gangplank was a part of the vessel. It was a part of the vessel's equipment which was placed in position to enable its passengers to reach the shore."

The order of the Appellate Division and that of the Industrial Board should be reversed and the claim dismissed, with costs in all courts.

CROUCH, LOUGHRAN and FINCH, JJ., concur with HUBBS, J.; CRANE, Ch. J., dissents in opinion in which O'BRIEN, J., concurs, and LEHMAN, J., dissents also.

Order affirmed.