Court Opinion

ID: 5183907
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:45:47.918489+00
Date Added: 2024-06-11T08:26:40.300762
License: Public Domain

Van Brunt, P. J.:
This action is' brought upon a liability policy of insurance, issued ■by the defendant on January 20, 1893, upon the steam tug Unit, and running for one year from January 30, 1893. On the 19th of June, 1893, the tug had in tow, alongside, the schooner Isle of Pvnes, and when she had reached a point in the East river between Blackwell’s island and the New York shore a collision occurred between an excursion barge, in tow of the steani tug Titan and the steam*139boat Thomas Iiunt, and the schooner Isle of Tines in tow of the tug Unit, by reason of which the schooner Isle of Times was sunk with a cargo in her valued at over $6,000.
A libel was filed in the District Court of the United States for the southern district of New York by the owners of the schooner, and the tug- Unit was seized by the marshal under process of said court. The plaintiffs defended the suit in the District Court at the request of the defendant and filed a stipulation for costs in the' amount of $250. The court held. all three vessels liable for the damages resulting from the collision. An interlocutory judgment ■fixing the liability, but not the amount of the damage, was entered on the 21st of June, 1894, after a trial upon the merits in said court. The final decree was entered on the 7th of November, 1895. There were also libels filed against the Unit in the District Court for supplies furnished to the tug, for wages and for coal. The tug was sold for $400. The marshal’s fees upon the seizure and sale were taxed at $188.40, which sum was paid to the marshal out of the proceeds of the sale, leaving a balance of $211.60, and against this sum two items were subsequently taxed amounting to $6.30, leav-' ing a net balance of $205.30, which was paid on account tó the claimants under the libels for wages and supplies.
In January, 1894, the libelants who had filed the libel in the rem suit filed another libel in' the personam suit against the plaintiffs herein, based upon the same facts as set forth in the libel in rem, and sought to recover in said personam action against these plaintiffs the sum of over $6,000. Issues were joined in this last-named action, but it does .not 'appear ever to have been brought to trial.
In the present action the plaintiffs. sought to recover $906.75, being the $400 for which the steam tug Unit was sold, $250 "the amount of the stipulation for costs, $150 counsel fees and $106.75 for disbursements attending the trial. The court directed a verdict for $379.69, and from the judgment thereupon entered and from an order denying a motion for a new trial both parties appeal to this court.
The policy upon which this action was brought provides substantially as follows: “ Providence Washington Insurance Com, pany, by this policy of insurance, do make insurance and cause S. Thomas and George H. Fernald on account of the assured, loss, if *140any, payable to them, to be insured in the sum of three thousand ■dollars at and from at noon, of the 30th day of January, 1893 (warranted by the assured to be then in safety), until at noon on the ■30th day of January, 1894, * * * against such loss or damage as the steamer tug Unit may become legally liable for from any ■accident caused by collision Or stranding as below stated. * , * *
“ Touching the adventures and perils which the said insurance ■company is contented to bear- and take upon itself by this policy, this insurance is to fully indemnify the assured for loss and damage ai’ising from or growing out of any accident caused by collision or stranding resulting from any cause whatever to any other vessel or •. vessels, their freights and cargoes (or each or any of them) for which said steamer or its owners may be legally liable. * * *
“ Should any loss or damage happen during the period insured as aforesaid, this company shall not be liable unless the liability of the said steamer for such loss or damage is determined by a suit at law ■or otherwise as this company may elect.”
The policy also contained the following clause : “ It shall be lawful and necessary to and for the assured, their agents, factors, servants and assigns to sue, labor and travel for, and to make all reasonable exertions in and about the defense, safeguard and recovery of the said vessels and cargoes, or any part tlierof, without prejudice to this insurance.”
Another clause provides that the loss shall be payable in sixty days after proofs of such loss or damages and the amount thereof •shall be made, and that in all cases of loss $200 shall be deducted therefrom.
Another clause also provides that all claims paid under said policy of insurance shall reduce the liability under the policy to the extent ■of the sums paid.
It - is claimed by the defendant- that it was not liable for counsel fees or any charges incurred by plaintiffs in the defense of the suit ■of the owners of the Isle of Pines, against the Unit under the terms of the policythat it was a condition precedent that the plaintiffs should cause the liability of the tug for the loss to be ■determined in a suit at law or otherwise as'the company might elect; and that this was a burden the tug accepted under the policy, 'and until the tug had done that she had no claim.
*141This position, we think to be well taken. The insurance was against the legal liability; and the policy provided that the company should not make good any loss, unless the liability for such loss or damage was determined by a suit at law or otherwise as the company might elect. The company had a right to say, under the terms of the policy, that the suit should be defended and the liability determined by a suit at law.
It is claimed that the liability would be determined by a suit at law if the suit was brought and not defended; but it is clear that that was not the intention of this clause in the policy. In order that there may be a determination of a controversy two sides must be presented ; and, therefore, when, the policy provides that the liability must be determined in a suit at law, it means with all the concomitants embraced within such a method of procedure.
It is to be observed that the company had an election, and when, it was applied to to make such election, it did so and said: “ Defend and determine the liability by a suit at law.” This was the method in which proofs of loss were to be presented, and such being the. contract, the company was not liable for the expenses to which the. assured was put in preparing his proofs of loss in accordance with the terms of the policy. As well might it be said in the case of a. standard policy of fire insurance, when proceedings are taken under the arbitration clause to ascertain the amount of damages, that the-insurance company, in case it is held liable for the loss, could be compelled to pay the expenses incurred by the assured in the arbitration.. The decree being a necessary part of the proofs of loss, the assured was bound to. defend the suit and establish the liability of the company at his own expense. There could not, therefore, under any circumstances, be. a liability greater than $400but we think that,, in view of the application of the $400 to the payment of the debts, of the owners of the tug, they have not been damaged even to the full extent of that sum. They were relieved of personal obligations by the application of a portion of the proceeds of the sale of' the tug to the payment of sums for which they were personally liable for supplies furnished to the tug and the wages of its crew. Clearly, so far as the proceeds of sale have been applied to the payment of these personal obligations of the owners, they have no» claim against the defendant insurance company.
*142It seems to ns to be equally clear that the defendant was entitled to a further deduction of the sum of $200, the particular average provided for in the policy. It is urged that this deduction should not ■ be made in this case, because it had already been made in the case of a previous loss to which this policy attached. But the language of the policy precludes any such construction. It is : “ And, in all cases of loss, two hundred dollars shall be deducted therefrom.” Not in case of loss, but in all cases of loss. This would seem to refer to divers and various losses under this policy, and, in each case, from the loss is to be deducted the sum of $200.
We have endeavored to ascertain upon what theory the court directed the verdict in the sum of $379.69, but have been unable to reach the same result by any combinations of figures which have suggested themselves; and the learned counsel for the appellants and respondents have not aided us in any respect by attempting to explain the theory upon which such direction is made. We are of opinion that the direction was wrong and that the judgment and order appealed from must be reversed arid" a new trial ordered, with costs to the defendant appellant to abide event. .
Babrett and O’Bbxek^ JJ.,, concurred.