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MARINE TRANSIT CORP. v. NORTHWESTERN FIRE & MARINE

February 7, 1933

MARINE TRANSIT CORPORATION
v.
NORTHWESTERN FIRE & MARINE INS. CO. et al.



The opinion of the court was delivered by: BYERS

BYERS, District Judge.

The libelant seeks to recover, from either or both of the respondents, $28,132.23, being the amount which it has paid in satisfaction of a decree rendered against it in behalf of Louis Dreyfus & Co., plus the sum of $5,814.03, counsel fees and disbursements incurred, making in all the sum of $33,946.26, with interest from April 14, 1932.

The case in which that decree was rendered is reported in 49 F.2d 215, and the facts (as stated in the opinion of the Circuit Court of Appeals) which gave rise to the liability are as follows:

 Dreyfus & Co. shipped 19,200 bushels of wheat upon the barge Edward A. Ryan, at Buffalo, for delivery at New York. The Ryan, with two other barges, was in tow of the tug Gerald A. Fagan on September 25, 1928, when, on entering the government lock at Troy, New York, the Ryan came in contact with the guard wall, and sank with its cargo.

 A libel in rem was filed against the Fagan and in personam against the Marine Transit Corporation, the carrier, with the result that a decree was entered in favor of Dreyfus & Co. as stated.

 The libelant in this cause procured from the Globe & Rutgers Fire Insurance Company a policy of insurance covering the tug Fagan against tower's liability claims, and on September 13, 1928, it declared the said shipment of grain to the Northwestern Fire & Marine Insurance Company under its open policy dated April 18, 1928, covering its legal liability as a carrier.

 This libelant was the owner of the tug Fagan and the barge Ryan, and the question for determination is where the ultimate loss should fall.

 In the brief filed for the Globe & Rutgers Company, it is conceded that the cargo loss was occasioned by the negligent navigation of the tug Fagan, and thus all questions of fact are eliminated from the case, and the decision will involve only questions of law arising under the contracts of the parties.

 Each respondent is generous in tendering its good offices to the libelant to demonstrate that liability lies with the other.

 It will be convenient to examine the policies in the order of priority. That issued by the Globe & Rutgers Company is on a form headed "A.I.A. Ocean Tug Special," and the tug is valued, for the purposes of insurance, at $30,000, and the policy is to cover any loss which may occur to her, etc., under conditions stated, with the privilege to navigate any coastwise and inland waters. The applicable provision of the policy reads as follows:

 "And it is further agreed that if the vessel hereby insured, or her tow shall come into collision with any * * * structure, floating or otherwise, * * *, and the assured, as owner of the vessel, shall in consequence thereof become liable to pay and shall pay by way of damages to any other person or persons any sum or sums not exceeding in respect of any one such casualty the value of the Vessel hereby insured, we, the assurers, will pay the assured such proportion of such sum or sums so paid as our subscriptions hereto bear to the value of the vessel hereby insured. And in cases where the liability of the vessel has been contested, with the consent in writing, of a majority of the underwriters on the hull and machinery (in amount), we will also pay a like proportion of the costs and/or expenses thereby incurred or paid; * * *

 "It is further agreed that in no event shall this Insurance Company be liable under this policy for more than the sum insured in any case, by reason of any or all of the conditions thereof."

 By a rider dated September 6, 1928, it is provided as follows:

 "It is hereby understood and agreed that the Deductible Average Clause in this policy is amended to read as follows: --

 "'In all cases $300. shall be deducted and in no event shall there be made a deduction of ...


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