Lapas attēli


Opinion of the Court.


ation were of paramount importance. Direct governmental operation of the merchant fleet insured sovereign immunity from regulation, taxation, and inspection, by other sovereignties both local and foreign. At the same time, the services of private shipping companies could be utilized because they possessed personnel skilled in the shoreside business of a ship and familiar with local port facilities and conditions. In addition these private companies were favorably situated through their union and other connections to secure seamen to man the vessels. As a result service agreements were designed whereby the shoreside services and administration of the merchant fleet were to be handled by existing private companies while the United States, through the master of the ship, retained full control over the navigation and physical operation of the vessel.

Two types of service agreements were drafted—the General Agency Agreement, with which we are presently concerned, and the Berth Agency Agreement. The general agent has the responsibility of husbanding the vessel and his duties are to victual, supply, maintain, and repair the ship. The duties of the berth agent relate primarily to the handling and loading of cargo and other port services such as wharfage and pilotage needed by the vessel. In foreign ports the berth agent also takes care of the husbanding services. There is necessarily a certain overlapping of duties, but to avoid any conflict of authority both the general agent and the berth agent were made subject to "such directions, orders, or regulations as the (United States) has prescribed, or from time to time may prescribe.” 17 This division of duties between


16 Promulgated by the Administrator, War Shipping Administration, in General Order No. 21, Sept. 22, 1942, and Supp. 4 thereto, Dec. 29, 1943. 7 Fed. Reg. 7561; 8 Fed. Reg. 17512.

17 Article 2 of the General Agency Agreement, form GAA 44 42, and Article 2 of the Berth Agency Agreement, form BA 12–29 43..

Opinion of the Court.

337 U.S.


the general agent and the berth agent emphasizes the fact that neither the possession nor management of the vessel was conferred on either of them. There could be no occasion for any conflict of authority with regard to orders received by the master as to the actual operation of the ship, for he was expressly made, in Art. 3A (d), the agent and employee of the United States with "full control, responsibility and authority with respect to the navigation and management of the vessel.”

Even the discretion vested in the agents was decreased by the master contracts which the United States executed for the furnishing of numerous services and supplies required by the vessels. There were also detailed instructions issued by the War Shipping Administration as to the terms of the contracts which the agents were authorized to enter into,19 and these contracts were required to be executed in the name of the United States as principal.20

At the time of the wartime requisition of the privately owned merchant fleet, the government administrative agencies concerned gave careful study to the question of whether the crews were to be employees of the shipping companies or of the United States. There were outstanding many collective bargaining agreements between the private shipping companies and the maritime unions. It was manifestly undesirable to disturb these existing agreements and for the Government to negotiate new


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18 Examples of such contracts are contained in the record of Caldarola v. Eckert, 332 U.S. 155, No. 625, 1946 Term.

19 For example, see Operations Regulations Nos. 27 (towage contracts); 84 (duties of berth agents, general agents, and agents); 97 (bunker oil contracts); 99, Supp. 1 and 2 (pilferage).

20 General Order No. 42 of the War Shipping Administration, 9 F. R. 4110.

21 See letter of April 28, 1947, from the General Counsel of the Maritime Commission to the Department of Justice.


Opinion of the Court.



ones. Yet it was essential that the masters and crews be government employees in order to obviate strikes and work stoppages, to insure sovereign immunity for the vessels, and to preserve wartime secrecy by confining all litigation concerning operation of the vessels to the admiralty courts where appropriate security precautions could be observed. The service agreements, therefore, provided that the officers and men to fill the complement of the vessel should be procured by the general agent through the usual channels upon the terms and conditions customarily prevailing in the services in which the vessels were to be operated. These men, however, were to be hired by the master of the ship and were to be subject to his orders only. The responsibility of employing the officers, so the Regulations show, was vested exclusively in the master, and the men so hired became employees of the United States and not of the general agent.25

Previously existing collective bargaining agreements were adhered to so that seamen's conditions of employment would be disrupted as little as possible by the change-over occasioned by government requisition of the vessels. See the War Shipping Administration's over-all collective bargaining arrangement with the nine princi


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22 See the Statements of Policy of May 4 and May 12, 1942, issued by the War Shipping Administration and the various maritime unions. WSA Operations Regulation No. 1.

23 Article 3A (d) of the General Agency Agreement, set out in text of opinion at p. 796.

Operations Regulations No. 15, Directive No. 2, issued by the War Shipping Administration provided: “The Master of a vessel has full discretion in signing on crew members and may reject any person seeking employment . Records shall be kept of the names of those rejected and of the reason for rejection and shall be submitted to the port office of the Recruitment and Manning Organization of the War Shipping Administration in the port in which the rejection occurs."

25 See Restatement, Agency, $ 79, comnient (a).

Opinion of the Court.

337 U.S.



pal maritime unions, known as the "Statements of Policy,” WSA Operations Regulations 1, May 25, 1942. Although the War Shipping Administration seamen fell within the exclusion of employees of the United States from the coverage of the National Labor Relations Act, the Administrator arranged to utilize the facilities of the National Labor Relations Board for the designation of bargaining units, while specifically reserving the Administration's rights with respect to the Board's absence of jurisdiction over personnel aboard WSA operated vessels. The House Committee on Merchant Marine and Fisheries, in reporting the Clarification Act, expressly approved of this practical solution of the collective bargaining problem.” A similar practical arrangement was made in connection with the functioning of the War Labor Board.

The shipping articles summarized above, pp. 785–786, complied with the tenor of the General Agency Agreement by making it clear that respondent was an employee of the United States. In order to pay the crew and the other expenses incidental to the operation of the ship, the War Shipping Administration deposited funds in a special joint bank account set up in the name of the agent “as general agent for the War Shipping Administration.” From this special account the general agent drew the funds and turned them over to the master to pay the crew. No money of the general agent was used for this purpose or in the operation of the vessel.

Thus the cases and an analysis of the relations established by the standard form agreement lead to the con

26 See letter of October 20, 1942, from the War Shipping Administration to the National Labor Relations Board, and the reply of October 26, 1942, record, pp. 43-51, in No. 360, Fink v. Shepard Steamship Co., post, p. 810.

27 H. R. Rep. No. 107, 78th Cong., 1st Sess., pp. 23-24.

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clusion that an agent such as Cosmopolitan, who contracts to manage certain shoreside business of a vessel operated by the War Shipping Administration, is not liable to a seaman for injury caused by the negligence of the master or crew of such a vessel.







No. 179. Argued February 1, 1949.-Decided June 27, 1949.

1. Respondent was employed by the United States as a general agent

under the terms of the war-time standard form of general agency agreement to manage certain phases of the business of a ship owned by the United States and operated by the War Shipping Administration. By an addendum to the agreement, it was also required to arrange for the transportation of passengers as agent of the United States. Certain women passengers and the husband of one of them sued respondent for damages sustained through injuries to the women resulting from the wrongful act of a member of the ship's crew. Held: Respondent was not liable as the owner pro hac vice, or as a common carrier operating the vessel, or as the employer of the master or crew. Cosmopolitan Shipping Co.

v. McAllister, ante, p. 783. Pp. 802–809. 2. Performance of such shoreside duties as issuing tickets, maintain

ing the vessel in the service directed by the United States, maintaining terminals and offices, arranging for loading and unloading passengers, arranging for advertising, provisioning the ship, and procuring officers and crew for hire by the master, all as agent of the United States, did not make the general agent liable as a

common carrier to the public or anyone. Pp: 805–808. 3. Petitioners argued here that respondent as an agent is independ

ently liable for its negligence in procuring unsuitable crew mem

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