Aktieselskabet Cuzco v. the Sucarseco

Background

A Norwegian ship (Toluma) and an American ship (Sucarseco) collided at sea. Both ships were partly at fault. Toluma put in to a port for repairs, discharged some cargo to make repairs, then reloaded it and completed the voyage. A general average adjustment apportioned the extraordinary expenses among ship and cargo. Cargo owners paid their share and then sued the American ship to recover those contributions. The lower courts disagreed until the Court of Appeals allowed the cargo owners’ claim.

Reasoning

The central question was whether the amounts cargo owners paid as their share of general average are part of the cargo’s collision damage and so recoverable from the other negligent ship. The Court explained that general average payments arose directly from the collision, that the ship’s master acts for cargo when sacrifices are made for the common safety, and that the Jason clause in the bill of lading only changes who pays initially, not the fact that the loss was caused by the collision. Because the contributions were the cargo owners’ own losses caused by the accident, the Court held they could recover those payments from the other negligent ship. The Court affirmed the Circuit Court of Appeals’ judgment.

Real world impact

Cargo owners who pay shared rescue or repair costs after a collision can reclaim those payments from the other ship responsible for the accident. This decision clarifies that contractual clauses shifting immediate payment do not stop cargo owners from suing the negligent third party for those direct collision losses.