Kalodner, Chief Judge, and Staley and Forman, Circuit Judges.
In the admiralty action brought by a seaman, James W. Swain (hereinafter appellant), against Isthmian Lines, Inc. (hereinafter appellee), the United States District Court for the Eastern District of Pennsylvania granted summary judgment for appellant and awarded $570 in damages. This appeal contests the amount of the damage award and the method of its determination. No cross appeal has been filed by the appellee contesting the entry of summary judgment adverse to it.
On May 27, 1963, appellant signed articles for a foreign voyage aboard the ship "Steel Designer" in the capacity of a utility messman at $284.52 monthly ($9.48 daily). In the port of Suez, on August 16, 1963, appellant reported ill. On the following day he was diagnosed as having syphilis in its primary stage, and was relieved of his duties as of August 16, 1963. The ship incurred a medical bill of $43.02 at Suez for appellant's needed drugs and medical treatment. With the ship's return to the United States on September 3, 1963, appellant signed off the vessel's articles. Appellee paid him wages for the foreign voyage from May 27, 1963 to August 16, 1963. From these wages were deducted, among other things, the $43.02 medical expense incurred by the ship at Suez. Appellant protested this deduction.
Appellant retained a proctor on September 10, 1963. On September 19 his proctor sent a letter to appellee formally protesting the propriety of the deduction of $43.02 from appellant's wages and asserting, among other things, a claim for penalties for the wrongful withholding. A week later, September 26, 1963, appellant received appellee's mailed reply denying appellant's claim. Some three and a half months later, January 10, 1964, appellant's libel, asserting the impropriety of the deduction and demanding penalties under Section 596*fn1 of 46 U.S.C. was filed in the District Court.*fn2 Appellee answered the libel on February 19, 1964, in which it defended the propriety of the $43.02 deduction from appellant's wages. On April 1, 1964 appellee paid appellant $43.02 to terminate the running of the penalty period. Appellant then limited his claim for penalties to the period September 3, 1963-April 1, 1964. Summary judgment having been moved on July 9, 1964 and an affidavit in support thereof filed on December 10, 1964, the District Court in an opinion*fn3 and order of March 1, 1965, granted appellant's motion and assessed $570 damages.
This case thus concerns a claim to a statutory penalty for an alleged wrongful withholding from a seaman's wages. In such a case there are three pertinent questions for a court's consideration: (1) Was an improper deduction taken from a seaman's wages considering the limited statutory instances when a deduction by a ship is proper?*fn4; (2) If a deduction were improper, was it "without sufficient cause" within 46 U.S.C. § 596 so that a penalty was triggered?*fn5; and (3) If a penalty runs, what is the standard for the determination of its amount?
As to the first consideration, the District Court found, supported by appellee's concession thereof, that the withholding of the $43.02 for medical expenses from appellant's wages was contrary to law. It has been eminently clear in the law, at the very least since the Supreme Court case of Isbrandtsen Co. v. Johnson*fn6 in 1952 that a deduction from wages for medical expenses such as were incurred by appellee in the instant case is wrongful as falling outside the proper deductible instances enumerated in 46 U.S.C. § 701. This question, therefore, has been closed for some time.
Despite its finding that appellee's action in withholding the $43.02 from appellant's wages was neither arbitrary nor unscrupulous, the District Court did assess a penalty. Therefore, it must have answered the second question by concluding that appellee, nevertheless, did not have sufficient cause to subtract the $43.02 from appellant's wages. Appellee does not contest before us the District Court's implicit finding of no sufficient cause for the wage deduction. Given the unmistakable clarity of the law at the time of the deduction, any successful contesting of the District Court's implicit finding on this point would certainly have been precluded in this case.
This brings us to the third inquiry, controlling within the facts of this case. What standard is determinative of the amount of the penalty to be assessed? The District Court employed an equitable yardstick to limit appellant's recovery to $570.*fn7 The question of how to measure the statutory penalties once an absence of sufficient cause for a wage deduction is determined is by no means of recent vintage, although, considering the age of the statutory provision involved, there are relatively few reported cases on the matter.*fn8 It is indeed a novel point of law for our court.
Section 596, the penalty provision at issue herein, states that once a master or owner withholds a seaman's wages without sufficient cause, the master or owner " shall pay to the seaman a sum equal to two days' pay for each and every day during which payment is delayed * * * which sum shall be recoverable as wages in any claim made before the court * *."*fn9 This penalty provision has undergone certain evolutionary changes. As originally enacted the master or owner was liable to pay the seaman a sum not more than the amount of two days' pay for each day, not exceeding ten, during which the payment was delayed.*fn10 Such a provision left the courts with a significant latitude in setting the rate for which such a penalty would run. In 1898, Congress seemingly legislated this discretion out of the Shipping Commissioner's Act by amending the penalty provision to provide for the payment of a sum equal to one day's pay for each day during which payment was delayed without sufficient cause.*fn11 Finally, in 1915, the penalty rate was adjusted upward, Congress awarding two days' pay for each day of delay in wage payment by a master or shipowner without sufficient cause.*fn12 This penalty has remained in effect since that time.
The "not more than" form of penalty, which explicitly reposes in the judiciary a significant measure of discretion in tailoring penalties to the equities of each case, is the language found in many of the penalty provisions of the Shipping Commissioner's Act.*fn13 A few sections, however, such as Section 596 involved herein, speak in, what is on their faces, mandatory language, seemingly vesting no discretion in the judiciary to reduce the amount of the penalty to be computed in accordance with the statutory formula.*fn14 This court, in construing one of these apparently mandatory penalty provisions, Section 594, has characterized such a provision as one providing for damages "which have been liquidated by legislative enactment."*fn15 Despite this rather precise statutory directive, of those cases which we have uncovered, where the question -- whether Section 596 of the statute may still be read with a measure of judicial discretion when supposed equitable considerations present themselves -- was considered, all have found proper the balancing of the statutory language with a judicial sense of the equities of each case. The presence of this unanimity, however, has not eliminated discomfort occasionally felt by the courts in exercising such discretion. In Dahl v. The S.S. Amigo*fn16 the anomaly of this situation emerges from the following language of the court:
"Although the statute would seem to indicate that the penalty provision should run until actual payment is in fact made, it appears to be the accepted rule of law that the time for which the penalty provision runs shall rest within the sound discretion of the court, depending upon and to be determined by the equities. * * * Upon review of the many cases holding that the penalty provision should run to various and different specified periods of time, it appears that an effort should be made to stabilize this feature of the penalty wage statute. Unless the particular equities in the given case would dictate otherwise, I believe the rule should be that the penalty provision shall run until such time as the libellant with the exercise of due diligence could have brought his action on to be heard in court."
In essence, though the Dahl court recognized the imperative feature of the statute, and was uncomfortable in adding to it, the urge to superimpose equitable considerations upon it was not restrained.
Where have the federal courts, with such unanimity, derived the authority to intrude equitable considerations into their reading of Section 596? The early case of Mystic S.S. Co. v. Stromland,*fn17 the later case of Mavromatis v. United Greek Shipowners Corporation,*fn18 and the more recent case of Southern Cross Steamship Co. v. Firipis,*fn19 all have relied on the Supreme Court's ruling in Pacific Mail S.S. Co. v. Schmidt,*fn20 as the source of their authority to exercise discretion in the interpretation of Section 596. Other cases have relied on these intermediate court decisions and there is now a solid net of precedent in support of the exercise of such discretion. Pacific Mail ...