Norwich Company v. Wright (1871)

In Norwich Company v. Wright (1871) 80 U.S. 104, the Supreme Court held that the owners of the offending vessel could, under the statute (the Act of 1851), discharge themselves from personal liability by surrendering the ship and freight. This would imply that the value of the ship at the time of surrender with the addition of the pending freight, if the surrender is made in a reasonable time, would furnish a proper criterion of the amount of liability. In the case cited it was also said p. 124 that, "if the vessel were libelled and either sold or appraised, and her value deposited in court, this sum, together with the amount of freight when proper to be added, would constitute the res or fund for distribution." Mr. Justice Bradley, referring to Maclachlan on Shipping, 1st ed. 598, laid down these general propositions: "Liens for reparation for wrong done are superior to any prior liens for money borrowed, wages, pilotage, etc. But they stand on an equality with regard to each other if they arise from the same cause." And the Court, in The City of Norwich, foreshadowed the consequences of permitting direct actions against liability insurers of shipowners: "No form of agreement could be framed by which shipowners could protect themselves. This is a result entirely foreign to the spirit of our legislation." It was phrased this way: "The history of the limitation of liability of ship-owners is matter of common knowledge. The learned opinion of Judge Ware in the case of The Rebecca, 1 Ware, 187-194, leaves little to be desired on the subject. He shows that it originated in the maritime law of modern Europe; that whilst the civil, as well as the common law, made the owner responsible to the whole extent of damage caused by the wrongful act or negligence of the master or crew, the maritime law only made them liable if personally free from blame to the amount of their interest in the ship."