Limitation of Liability Hearings





- of the - 
COMPANY, LTD., for limitation of
liability as owner of the Steamship "TITANIC".






By an order dated the 8th of January, 1913, I was directed to report the value of the Titanic as to all items, except moneys received or receivable from the British Government under certain mail contracts; and I was directed to file a supplementary report, after taking proof as to such moneys.

Upon the further hearings I have been attended by counsel for the various parties and there have been placed in evidence before me certain exhibits relating to the mail contracts. On July 31st, 1899, a contract was made between the petitioner and the Postmaster General for the carriage of the mails between Great Britain and the United States, called the Principal Agreement. A subsequent contract was made, dated April 16, 1907, called the Supplemental Agreement.

The Principal Agreement called for payments to the petitioner upon a basis of weight, and the Supplemental Agreement contained a clause modifying it and providing that in no single year should the total payment to the company exceed £70,000. A considerable period before the Titanic sailed the petitioner had earned the £70,000 provided in the Supplemental Agreement.

In August, 1911, some months before the Titanic sailed, the petitioner made for its own bookkeeping purposes, an apportionment of the £70,000, expected to be earned, among the various steamers and there was apportioned to the voyage upon which the Titanic sailed, the sum of £1264. The question before me is, was the sum so apportioned or any other sum, a part of the pending freight of the Titanic?

I think not; the contracts are for the conveyance of the mails, which involves receipt, carriage and delivery.

Section Two of the Principal Agreement requires the petitioners to convey the mails; Section Three requires the vessels to proceed to New York; Section Seven requires the master to deliver the mails and to furnish evidence of the delivery in the form of abstracts of logs. Section 17 covers the exigency of a vessel being at sea at the time of the expiration of the agreements and provides that the voyage shall be continued and performed and the mails shall be conveyed and delivered as if the agreement had remained in force with respect; to such ship.

All of these provisions, to my mind, point to but one conclusion, that the contracts are not performed by the petitioner in respect to any of its ships unless the mails of that ship are delivered. Furthermore it may be said, strictly speaking, that no part of that £70,000 could have been earned by the Titanic, although the petitioner was under the obligation to convey the mails delivered to her in order to earn the £70,000 by the performance of its contracts. I therefore conclude that the sum apportioned was no part of the freight unless the prior payment of £70,000 constituted a prepayment, which the company was entitled to retain as it might, under certain circumstances, retain prepaid freight.

I cannot spell out of the agreements any justification for such an analogy; the general rule of law that freight must be earned in order to be due requires clear evidence to justify a contrary rule. No provisions in the contracts furnish such evidence. No cases are cited by counsel for the claimants to sustain such a contention, even assuming that the agreements are interpreted by the law of Great Britain. The only citations in the brief are of sections in Carver's Carriage by Sea and these are not adjudicated cases. Furthermore the citations are not applicable, inasmuch as they refer to contracts of carriage which by their terms make the freight payable in advance; or contracts which do not make the payment depend on delivery, but on shipment or at a definite time after the ship has sailed. But the Principal Agreement specifically provides (Sec. 13 (1)) that "in consideration of the covenants and agreements herein contained and on the part of the company to be observed and performed," the Postmaster General shall make the payments therein set forth. It is true that the language quoted is not "in consideration of the performance of the covenants" &c. but it must have that meaning; otherwise the company would be entitled to payments on making the covenants, not performing them, an absured result. Therefore to be entitled to payment, it must perform; and receipt of the mails is not performance.

Suppose, by a violent, supposition, that all of the ships of petitioner had been lost after sailing with the mails, could it claim its compensation? Obviously not. Why then should one ship earn a part, when all the ships would not earn the whole? Suppose again that the £70,000 had all been earned except the part which the Titanic would have earned and that her performance was necessary in order to complete the £70,000. It obviously could not be said that she had earned her part, unless she delivered.

I therefore conclude that there was no freight pending in respect of any sums paid for carrying the mails.

All of which is respectfully submitted.

Henry Goodrich (sig)

Dated, April 18th, 1913.