## Facts

- Salz shipped a cargo of barley from Sacramento, California, to San Francisco with Sacramento Navigation Co., a common carrier.
- The carrier issued a bill of lading for carriage by barge, reserving a contractual privilege to reship on steamboats or barges and to tow multiple barges with one steamer.
- The cargo was loaded onto an unpowered barge (“No. 3”) to be towed downriver by the carrier’s steamer.
- During the voyage the barge grounded, and the cargo was lost.
- The trial court found the loss was caused by negligent navigation of the towing steamer, not by defects in the barge or its equipment.
- The bill of lading incorporated § 3 of the Harter Act, which relieves a vessel owner (after due diligence to ensure seaworthiness and proper manning/equipment/supply) from liability for faults or errors in navigation or management of the transporting vessel.

## Issues

1. For Harter Act § 3, does the “vessel transporting merchandise or property” include the combined barge-and-towing-steamer unit, rather than the barge alone?
2. If so, may the carrier invoke § 3 immunity for cargo loss caused solely by negligent navigation of the towing steamer, assuming due diligence to make the combined unit seaworthy?

## Decision

- The Supreme Court reversed the Ninth Circuit and held for Sacramento Navigation Co.
- The Court construed the bill of lading as a contract of affreightment necessarily contemplating carriage by an unpowered barge used in conjunction with a towing vessel supplied by the carrier.
- In that setting, the barge and towing steamer together constitute the “vessel transporting merchandise or property” within Harter Act § 3.
- Because the loss resulted solely from navigational error of the towing steamer, and there was no finding of lack of due diligence to make the barge-and-steamer unit seaworthy, § 3 barred liability.

## Legal Principles

- Under Harter Act § 3, when transportation necessarily depends on an unpowered barge towed by a tug/steamer furnished by the carrier, the barge and towing vessel are treated as a single transporting vessel for purposes of the statute.
- If the carrier exercises due diligence to make the transporting unit seaworthy and properly manned, equipped, and supplied, the carrier is exempt from liability for cargo loss caused by faults or errors in navigation or management of that unit, including navigation by the towing vessel.
- A strict-construction approach does not require narrowing statutory terms beyond their natural meaning where text and context support the broader reading.

## Conclusion

The Court held that Harter Act § 3 applies to a barge-and-towing-steamer combination as the transporting vessel, shielding a carrier from cargo-loss liability caused solely by negligent navigation of the towing steamer when due diligence to ensure seaworthiness of the combined unit is shown.


Sacramento Navigation Co. v. Salz, 273 U.S. 326 (1927)