Robins Dry Dock & Repair Co. v. Flint

Background

A company that had rented the steamship for a period (the charterers) sued a dry dock company (the repair yard) to recover for the ship’s lost use from August 1 to August 15, 1917. The charter required the ship to be docked at least once every six months and allowed hire payments to stop until the ship was fit for service. The ship was delivered to the repair yard, and while there the yard negligently damaged the propeller, requiring a new one and causing the delay. The repair yard settled with the shipowners later in the year and received a release of claims. Lower courts had allowed the charterers to recover, and the case reached this Court for review.

Reasoning

The key question was whether the renters could sue the repair yard directly for the delay the renters suffered. The Court said no. It explained that the repair contract was between the yard and the owners and was not made for the charterers’ direct benefit. The charterers had no property right in the ship while the owners remained in possession, and their loss resulted only through their separate contract with the owners. The Court emphasized the general rule that a wrongful act against one person (a “tort,” a wrongful act causing damage) does not normally make the doer liable to a different person who happens to have a contract with the injured party when the wrongdoer did not know of that contract.

Real world impact

The decision limits when renters can sue third parties for delays caused by negligent repair work. Charterers must look to the owners or their own contracts for recovery when the delay flows from the owner–repairer relationship. The Court therefore reversed the lower-court judgment that had let the renters recover directly from the repair yard.