5. Maritime Contracts and Torts.—
The general subject matter of admiralty jurisdiction is maritime contracts and maritime torts or injuries. A contract is maritime when it relates to the ship as an instrument of commerce and navigation. Thus the hiring of a master, the purchase of supplies, the charter-party or bill-of-lading, an agreement of towage, and the like are maritime contracts. The principle by which to determine whether a contract is maritime in its nature, was laid down by the Supreme Court in the case of the Belfast, 7 Wall. 624. "Contracts, claims, or service, purely maritime and touching rights and duties appertaining to commerce and navigation, are cognizable in the admiralty courts." And in Insurance Co. v. Dunham, 11 Wall. 1:
As to contracts, it has been equally well settled that the English rule which concedes jurisdiction, with a few exceptions, only to contracts made upon the sea and to be executed thereon (making locality the test) is entirely inadmissible and that the true criterion is the nature and subject-matter of the contract, as whether it was a maritime contract, having reference to maritime service or maritime transactions.
*****
Perhaps the best criterion of the maritime character of a contract is the system of law from which it arises and by which it is governed. And it is well known that the contract of insurance sprang from the law maritime, and derives all its material rules and incidents therefrom.
The test is not altogether definite, nor always easy to apply. As was said in Grant v. Poillon, 20 How. 162: "It may be difficult, if not impracticable, to state with precision the line of this jurisdiction, but we may approximate it by consulting the decisions of our own courts."
A tort is a wrong, independent of contract, that is, it is the breach of a duty which is imposed by law and not by contract. A tort is maritime when it is committed on navigable waters. Injuries to sailors on shipboard, damage to cargo and collision at sea are maritime torts. Illustration of maritime torts and a distinction between land and maritime torts will be found in the chapters on Collisions and Maritime Liens, infra. The case of Hough v. Western Transportation Co., 3 Wall. 20, may be mentioned here. A vessel made fast to a wharf took fire by the negligence of the master and crew. The fire was communicated to the wharf and destroyed it with the buildings adjacent thereto. The court held that although the origin of the wrong was on the water, the substance and consummation of the injury occurred on land and the case was not within admiralty jurisdiction.
Salvage and general average are, strictly, neither contract nor tort, but are within admiralty jurisdiction by virtue of the general law.