Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 27

FACTS The MacGilvray Shiras was a ship owned by the Kinsman Transit Company. During the winter months when Lake Erie was frozen, the ship and others moored at docks on the Buffalo River. As oftentimes happened, one night an ice jam disintegrated upstream, sending large chunks of ice downstream. Chunks of ice began to pile up against the Shiras, which at that time was without power and manned only by a shipman. The ship broke loose when a negligently constructed ''deadman'' to which one mooring cable was attached pulled out of the ground. The ''deadman'' was operated by Continental Grain Company. The ship began moving down the Sshaped river stern first and struck another ship, the Tewksbury. The Tewksbury also broke loose from its mooring, and the two ships floated down the river together. Although the crew manning the Michigan Avenue Bridge downstream had been notified of the runaway ships, they failed to raise the bridge in time to avoid a collision because of a mix-up in the shift changeover. As a result, both ships crashed into the bridge and were wedged against the bank of the river. The two vessels substantially dammed the flow of the river, causing ice and water to back up and flood installations as far as three miles upstream. The injured parties brought this action for damages against Kinsman, Continental, and the city of Buffalo. The trial court found the three defendants liable, and they appealed from that decree.
DECISION Decree of trial court affirmed as to liability.
OPINION Friendly, J. The very statement of the case suggests the need for considering Palsgraf v. Long Island RR., [citation], and the closely related problem of liability for unforeseeable consequences.
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We see little similarity between the Palsgraf case and the situation before us. The point of Palsgraf was that the appearance of the newspaper-wrapped package gave no notice that its dislodgement could do any harm save to itself and those nearby, and this impact, perhaps with consequent breakage, and not by explosion. In contrast, a ship insecurely moored in a fast flowing river is a known danger not only to herself but to the owners of all other ships and structures down river, and to persons upon them. No one would dream of saying that a shipowner who ''knowingly and wilfully'' failed to secure his ship at a pier on such a river ''would not have threatened'' persons and owners of property down-stream in some manner. The shipowner and the wharfinger in this case having thus owed a duty of care to all within the reach of the ship's known destructive power, the impossibility of advance identification of the particular person who would be hurt is without legal consequence. [Citations.] Similarly the foreseeable consequences of the City's failure to raise the bridge were not limited to the Shiras and the Tewksbury. Collision plainly created a danger that the bridge towers might fall onto adjoining property, and the crash of two uncontrolled lake vessels, one 425 feet and the other 525 feet long, into a bridge over a swift ice-ridden stream, with a channel only 177 feet wide, could well result in a partial damming that would flood property upstream.
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All the claimants here met the Palsgraf requirement of being persons to whom the actors owed a ''duty of care,'' ***. But this does not dispose of the alternative argument that the manner in which several of the claimants were harmed, particularly by flood damage, was unforeseeable and that recovery for this may not be had-whether the argument is put in the forthright form that unforeseeable damages are not recoverable or is concealed under a formula of lack of ''proximate cause.''
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Foreseeability of danger is necessary to render conduct negligent; where as here the damage was caused by just those forces whose existence required the exercise of greater care than what was taken-the current, the ice, and the physical mass of the Shiras, the incurring of consequences other and greater than foreseen does not make the conduct less culpable or provide a reasoned basis for insulation. [Citation.] The oft encountered argument that failure to limit liability to foreseeable consequences may subject the defendant to a loss wholly out of proportion to his fault seems scarcely consistent with the universally accepted rule that the defendant takes the plaintiff as he finds him and will be responsible for the full extent of the injury even though a latent susceptibility of the plaintiff renders this far more serious than could reasonably have been anticipated. [Citation.]
The weight of authority in this country rejects the limitation of damages to consequences foreseeable at the time of the negligent conduct when the consequences are ''direct,'' and the damage, although other and greater than expectable, is of the same general sort that was risked.
INTERPRETATION The unforeseeability of the exact manner and extent of a loss will not limit liability where the persons injured and the general nature of the damage were foreseeable.
CRITICAL THINKING QUESTION Compare this decision with that in the Palsgraf case and attempt to reconcile the two decisions.