On Petition for Rehearing on Limitation
PER CURIAM.On May 31, 1957, this court handed' down an opinion in this case which af*471firmed the decision of the trial court rejecting the claim of appellant States Steamship Company for exoneration from liability for loss resulting from the sinking of the S.S. Pennsylvania, and granting its claim for limitation of liability. Thereafter all parties filed petitions for rehearing. Upon consideration of those petitions the court withdrew its former decision of May 31, 1957, and on November 15, 1957, substituted a new opinion which upheld the appeals of the appellant insurance companies, the United States, and the Dominion of Canada, from the decree limiting liability of States Steamship Company. Thereafter States Steamship Company filed a further petition for rehearing and upon invitation of the court, the insurance companies, the United States and the Dominion of Canada filed briefs in answer thereto, to which the Steamship Company has filed a reply.
Our further study of the points raised by this petition for rehearing convinces us that whether it be our fault, or otherwise, our decision of November 15, 1957, has been misunderstood, and we now make this further effort to clarify the basis for that decision.
Our opinion stems from the findings of the district court. We take those findings and then inquire, in view of the whole record, what those findings require. They are:
1. “ * * * the sole and proximate cause of the sinking of the Pennsylvania being her own unseaworthiness.” (Finding III.)
2 “ * * * the contributory factors responsible for the sinking of the S.S. Pennsylvania are found in the radiograms sent from the vessel immediately prior to her sinking stating that the vessel sustained a crack down the port side between frames 93 and 94; that the crack started in the sheer strake and ran down about 14 feet; that sea water •entered the engine room of the vessel through this crack.” (Finding IV.) (The finding also listed a failure of the ■steering system; the taking of water in the No. 1 hold; the coming adrift of the deck cargo; and the No. 2 hatch being open and full of water.)
3. “That the foregoing faults, failures, breakdowns and defects set forth in the preceding finding IV, together with the crack sensitiveness of the vessel to extreme cold weather * * * were factors of unseaworthiness culminating from the unseaworthy condition of the vessel at the inception of her voyage.” (Finding V.)
4. The crack sensitiveness mentioned was “by reason of a former 22-foot crack in her deck occurring on her previous Voyage V, which crack was fully repaired.” (Finding V.)
5. This unseaworthy condition “prevented her from meeting the expected and to be anticipated weather conditions.” (Finding V.)
6. This unseaworthy condition “proximately caused her sinking with the total loss of the vessel.” (Finding V.)
7. “That the evidence is insufficient to show that petitioner used the due diligence required by law to make the vessel seaworthy at the inception of her voyage, and the Court finds that the petitioner did not use the due diligence required by law to make the vessel seaworthy and to entitle it to exoneration from liability.” (Finding VI.)
We accepted these findings and held that States Steamship Company had not sustained its burden of proving that it was entitled to a limitation of liability, saying:
“The reason there is no basis for the limitation here is that the only persons whose negligence could have operated to bring about the unsea-worthy condition, the only persons to whom the lack of due diligence could possibly be charged, were persons who were managing officers of the corporation. The court not only did not find that the failure to exercise due diligence was that of minor or subordinate employees, but the court could not have made such a finding.
“The only persons who were on the scene and had anything to do *472with these factors of unseaworthiness were managerial employees.”
The Steamship Company insists that we erroneously misinterpreted the trial court’s findings of fact. It asserts that the court’s finding VI (No. 7, above), was a finding relating to the Steamship Company’s claim for exoneration', that it had no relation whatever to a question of limitation of liability or the question of privity and knowledge with which the court below dealt in its finding VII.1
The Steamship Company argues that in drawing our conclusions we have set forth a broad rule that in any case where the Steamship Company fails to use due diligence to make the vessel seaworthy at the inception of her voyage, limitation must be denied. We did not so hold.
There is respectable authority which would warrant the holding that where the circumstances are such that the owners or managing agents have a duty to act to see that the vessel is made seaworthy, a neglect or failure to take such action will require denial of limitation. Mere instructions to subordinate employees will not suffice to give the owner the benefit of the limitation act. Such a case was Spencer-Kellogg Co. & Sons v. Hicks, 285 U.S. 502, 510, 52 S.Ct. 450, 76 L.Ed. 903, where limitation was denied because the manager, although he had given appropriate instructions to the master, had not followed up by inquiries or personal inspection himself. The court said (285 U.S. at page 510, 52 S.Ct. at page 452): “Before allowing the ferriage operation he was under obligation to assure himself by inquiries or by personal inspection that the Linseed King should not incur the hazard of colliding, as she did, with ice floes in the river. * * * The owner was therefore chargeable with negligence in not taking measures for the safety of the passengers which the weather conditions required.” 2 Mere nonaction on the part of managing agents in their allowing subordinates to prepare a ship for departure will not serve to excuse the owner from any portion of his responsibility if the knowledge of the managing agent is such that they ought to inquire and inspect. Williams S. S. Co. v. Wilbur, 9 Cir., 9 F.2d 622.3
*473There is no doubt that Vallet, the port engineer, did have a duty to make inquiries and personal inspection at the time the Pennsylvania started her voyage. But that circumstance was not alone the basis for our decision. The court’s finding of lack of due diligence, it is true, refers to exoneration.4 But it must necessarily be related to the facts of this particular case. Here one of the factors of unseaworthiness was the crack sensitiveness of the vessel and it in turn existed by reason of a former 22 foot crack in her deck. It is not material here whether the words “by reason of” were meant to say that the former crack caused the later crack, or whether the meaning is simply that her crack sensitiveness was revealed by the former 22 foot crack. In any event, and as a simple fact found by the court, the vessel was unseaworthy and was in part unsea-worthy because of the crack sensitiveness.
The question next is: whose lack of due diligence sent a ship thus unsea-worthy to sea ? The only conclusion that any one would be entitled to draw from the evidence in this record was that Val-let was the one man so chargeable. This is not a case where it could be speculated that Vallet was off on vacation or not on duty when the failure to “use the due diligence required by law to make the vessel seaworthy”, took place. Our former opinion sufficiently details what the evidence showed as to Vallet’s connection with this crack problem from beginning to end and his complete knowledge of the crack sensitiveness of the vessel. It is impossible to disassociate Vallet from all of this under any possible view of the evidence. He permitted the vessel to sail on her fatal trip, and if, as the court found, there was lack of due diligence to make the vessel seaworthy in these respects, that lack of due diligence was in major part that of Vallet.
Some complaint is made that we improperly treated Mr. Brenneke as an executive officer.5 Whether he was or not is immaterial here for in the sending forth of a ship known to have the crack sensitiveness of this one Vallet was the prime actor and for our purposes here it was immaterial whether as one who participated in that action and contributed thereto Brenneke was a managing officer or a minor employee.
It is thus apparent that the district court found there was negligence. After noting that that finding was abundantly supported by evidence, we have by our decision pointed out that upon this record such negligence was necessarily the negligence of Vallet. Accordingly we hold limitation of liability must be denied.
*474The burden of proof of absence of privity or knowledge is upon the shipowner. Coryell v. Phipps, 317 U.S. 406, 409, 63 S.Ct. 291, 87 L.Ed. 363. (And see cases cited in Gilmore and Black, p. 705). Our holding is, like that in Triple A Machine Shop v. Waterman Steamship Corporation, 9 Cir., 221 F.2d 916, 917, that “the shipowner did not sustain its burden of proof.”
This privity or knowledge which results from Vallet’s connection with the preparation of the vessel for departure results in part from the principles underlying the limitation act itself. In Spencer-Kellogg Co. v. Hicks, supra, 285 U.S. at page 511, 52 S.Ct. at page 453, the court noted the necessary distinction between the shipowner’s responsibility for the neglect of sea-going employees and his responsibility in respect to his shoreside organization. Meeting an argument that in that ease the fault was that of a competent master to whom instructions had been given and that the owner had done its full duty, the court said: “Cases such as La Bourgogne, 210 U.S. 95, 28 S.Ct. 664, 52 L.Ed. 973, which involved the master’s failure to obey rules and instructions when on the high seas and disaster attributable to such fault, are cited. But there is a vast difference between the cases relied on and the instant one. The launch was used for ferriage over a distance of about a mile and a third. She was known to be unseaworthy and unfit if there was ice in the river. There is no analogy between such a situation and that presented in the cited cases where the emergency must be met by the master alone. In these there is no opportunity of consultation or cooperation or of bringing the proposed action of the master to the owner’s knowledge. The latter must rely upon the master’s obeying rules and using reasonable judgment. The conditions on the morning in question could have been ascertained by Stover, if he had used reasonable diligence, and we think the evidence is adequate to support the finding that the negligence which caused the disaster was with his, and therefore with the owner’s, privity or knowledge.” The reason for this “vast difference” there stated, is well described by Gilmore and Black as follows (p. 696): “The principle of the Limitation Act is the same as that found in the Harter Act and the Carriage of Goods by Sea Act: because of the extraordinary hazards of seaborne commerce and because the owner can exercise only a nominal control over his ‘servants’ once the ship has broken ground for the voyage, the owner should be entitled to exoneration from liability, or at least to a limitation of liability, for whatever happens after the ship has passed beyond his effective control. Contrariwise, he should be held to liability for all loss resulting from his failure to exercise effective control when he had the chance,6 Although the Limitation Act uses a vocabulary different from that of Harter and Cogsa, the concept of liability is the same: the shipowner is not chargeable with ‘privity or knowledge’ or with ‘design or neglect’ when he has used ‘due diligence’ to furnish a seaworthy ship; he is so chargeable when he has failed in his duty of ‘due diligence’ and has sent out a ship unseaworthy in some respect that proximately contributes to the loss.” 7
*475Petitioners make reference to the portions of the evidence in the record which they say tends to show that the steel of the Pennsylvania was no different from the steel of all welded ships built at the same time. Reference is made to technical reports and to testimony of witnesses who surveyed and inspected the ship or samples of her steel tending to show that there was no lack of due diligence in making the ship seaworthy. 'There is no question but that the record contains a substantial amount of evidence to that effect. The difficulty is that the trial court rejected it in the findings which we have quoted above. When the court found that the proximate cause of the sinking was the Pennsylvania’s unseaworthiness; that the crack sensitiveness by reason of her former 22 foot crack in her deck was a factor of unseaworthiness culminating from her unseaworthy condition at the inception of her voyage and that there was a lack of due diligence to make the vessel seaworthy, it rejected the contrary evidence now cited to us in the Steamship Company’s petition for rehearing.
It is suggested that there is something in our opinion to the effect that all welded steel vessels are unseaworthy. As authority for this assertion petitioner quotes from a television broadcast in which the broadcaster purports to construe the meaning of our decision. The broadcaster is mistaken; we did not so hold.
The petition contains a table taken from one of the exhibits in the case showing the number of fractures and casualties in some 4694 ships built by the Maritime Commission. This table shows a substantial number of fractures and casualties. On the basis of this, petitioner asserts that in respect to the likelihood of cracks and fractures, the Pennsylvania was exactly like all other welded steel ships and is no different from the bulk of dry cargo tonnage in the American Merchant Marine.
But the 127 cases of serious casualties listed in this table do not contain any Victory class vessels such as the Pennsylvania. The Pennsylvania was unique in its prior Class I hull fracture on Voyage V. The testimony showed that there had been over 2000 shipping years of experience with Victory ships and there was no history of a Class I casualty on such a ship. The failure of due diligence found by the court was in sending a ship known to be crack sensitive upon that voyage.
The suggestion that our decision puts all welded ships out of business over the northern route is wholly unwarranted.
The petition for rehearing is denied.
In this effort to clarify our decision we believe we have at least somewhat improved upon the statements made in our Nov. 15, 1957, opinion.
. Finding VII was as follows: “That the evidence is sufficient to show that the unseaworthy condition of the vessel at the inception of her voyage was without the privity or knowledge of petitioner, and the Court finds that the unseaworthy condition of the vessel at the inception of her voyage was not with the privity and knowledge of the petitioner.”
. See Gilmore & Black, “The Law of Admiralty”, 1957, p. 701: “Some duties appear to be ‘nondelegable’, which is a way of saying that the corporation will be conclusively presumed to have ‘privity or knowledge’ of the breach, or, more directly, that the corporation will not be entitled to limit its liability in such a case no matter what the state of proof on actual privity or knowledge.
“The nondelegable duties are all facets of what is referred to in other contexts as the shipowner’s duty to provide a seaworthy ship or at least to use due diligence to do so. ‘Seaworthiness’ is a word which in recent years has suffered from a strange expansion of meaning. Its primitive sense was no doubt what any English-speaking person, not a member of the admiralty bar, would expect it to mean today; that the ship in question must be, in the language of the customary charter-party warranty, ‘tight, staunch, strong and well and sufficiently tackled, appareled, furnished and equipped.’ If a corporate owner fails to use Aue diligence to send forth his ship seaworthy in that primitive sense, and the unseaioorthiness promimately causes loss or damage, the owner will he denied limitation. The corporate owner, unlike the individual owner, will not be allowed to escape liability for breach of his basic duty by delegating either to a master or to subordinate shore officials.” (Emphasis added.) The authors cite as authority for this position, Grace & Co. v. Charleston Lighterage & Transfer Co., 4 Cir., 1952, 193 F.2d 539, 1952 A.M.C. 689.
. This and other similar cases were explained by Mr. Justice Brandeis in Earle & Stoddart v. Ellerman’s Wilson Line, 287 U.S. 420, 427, 53 S.Ct. 200, 201, 77 L.Ed. 403, in a footnote as follows: “In all the cases where immunity from liability for damage by fire was held to be lost because of neglect of the owners, the courts have based their finding of *473neglect on the action of the owners or managing agents, or upon their failure to see that action was taken where it was their duty to act.”
. We did not question that in making its finding VI, quoted above, the court below had in mind the provisions of section 3(1) of the Carriage of Goods by Sea Act, 46 U.S.C.A. § 1303(1), providing: “The carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to — (a) Make the ship seaworthy”, and section 4(1), 46U.S.C.A. § 1304(1), providing that neither carrier nor ship shall be liable for loss resulting from unseaworthiness “unless caused by want of due diligence on the part of the carrier to make the ship seaworthy * * * in accordance with the provisions of paragraph (1) of section 3.” Of course, in making such a finding, a court in some other case might 259 TT.2d — 30% well predicate its finding of failure to use duo diligence upon evidence that the negligence or fault was that of any agent whatever, regardless of rank, provided the agency was sufficient to give rise to an application of the rule of respondeat superior.
. The testimony as to Brenneke, given by Vallet, was as follows:
“Q. During the month of December and January of 1951 and ’52 would you say that Mr. Brenneke was your assistant marine superintendent? A. He was my assistant. We don’t have the title of assistant marine superintendent.
“Q. You were just marine superintendent ; is that correct? A. Yes.
“Q. But you do have the title of assistant port engineer? A. Yes.
“Q. And Brenneke was the No. 1 man under you; is that correct? A. Yes.”
. Illustrations of tliis failure to exercise effective control when the owner “had the chance”, are found in The Cleveco, 6 Cir., 154 F.2d 605, 613: (“ * * * knowledge means not only personal cognizance but also the moans of knowledge — of which the owner or his superintendent is bound to avail himself — of contemplated loss or condition likely to produce or contribute to loss, unless appropriate means are adopted to prevent it.”), and in Great Atlantic & Pacific Tea Co. v. Brasileiro, 2 Cir., 159 F.2d 661, 665 (“The measure in such cases is not what the owner knows, but what he is charged with finding out.”).
. The authors add the following interesting comment: “The foregoing comment is not meant to suggest that courts customarily eross-cite Limitation Act cases and Harter Act or Oogsa cases. There is indeed authority for the proposition that the Limitation Act imposes on the shipowner a lower standard of care than do the Harter Act and Oogsa; that is, failure to have exorcised ‘due diligence’ *475under Harter or Cogsa does not automatically deprive the shipowner of his defense under the Fire Statute or the Limitation Act. No recent cases, however, have restated the doctrine of the lower Limitation Act standard. If the older cases are in time overruled or forgotten, in line with the discernible judici-cial trend to narrow the Limitation Act by construction, the situation would then be that, if the carrier is liable to cargo under the Harter or Cogsa, it would also lose its privilege under the Limitation Act. As to cargo liability, then, the Limitation Act would be in effect superseded by Harter and Cogsa, and would continue to be of importance with respect to collision, loss of life and personal injury claims.”