Before MEDINA and HINCKS, Circuit Judges, and MATHES, District Judge.*fn*
The plaintiff sued to recover for personal injuries, under the Federal Tort Claims Act, 28 U.S.C.A. § 1346(b), sufferred in a building owned and maintained by the United States for the use of the United States Merchant Marine Academy. The defendant brought in, by third-party complaint, Lieutenant McGuire, the Ship's Service Officer of the Academy who was the officer in charge of the Ship's Service Store, which occupied part of said building, and an insurance carrier, Royal Indemnity Company (Royal), which had written liability insurance on the premises. After a trial without a jury, the district court judge gave judgment for the plaintiff against the defendant, and for the third-party defendants on the third-party complaint. From the judgments in favor of plaintiff and in favor of Royal, the United States appeals. The plaintiff also appeals on the ground that his award was inadequate. No appeal was taken from the judgment dismissing the third-party complaint against Lieutenant McGuire.
The plaintiff, who was employed by a news company, on the morning of January 5, 1952 was delivering newspapers to the Ship's Service Store of the Merchant Marine Academy at Kings Point, New York. Daily deliveries were made to an entrance of the store below ground level to which in common with other space occupied by the Academy, a twelvestep exterior uncovered stairway led. Alongside the stairway was a chute down which Grant ordinarily slid the bundles of newspapers but on the morning when the accident occurred it was raining and the surface of the chute was wet so that the bundles would not slide. Grant therefore carried two bundles of papers, one on his shoulder and the other in his hand, down the stairway which ordinarily was lighted by overhead lights. On this morning, the trial judge found, the lights were not turned on. When Grant had descended about nine steps, he mistakenly assumed he had reached the bottom; he stepped forward instead of down, fell and injured his right knee.
The Store was operated by Lieutenant McGuire, an officer of the United States Merchant Marine, under his duty assignment as Ship's Service Officer. It was located in a government building the rest of which was used by the Academy. Its profits, after payment of salaries to employees, went into the Academy welfare fund. The trial judge found, and it is not questioned on this appeal, that the Store was an integral part of the Academy which was an instrumentality of the United States. Act of Aug. 4, 1939, § 5, 46 U.S.C.A. (ed. 1940) § 1126. See also Act of May 11, 1944, 58 Stat. 220, and 46 U.S.C.A. (ed. 1952) § 1126 et seq.
The insurance policy under which the United States claims coverage was issued on June 30, 1945 and was to run until cancelled by either party. It named as the insured the "Ship's Service Officer, United States Merchant Marine Academy." It had never been cancelled. The premium sas to depend on the gross sales of the Store which were to be reported every quarter. Relevant provisions of the policy are set out in the margin.*fn1
"Coverage A - Bodily Injury Liability Because of bodily injury, sickness or disease, including damages for care and loss of services and including death at any time resulting from said bodily injury, sickness or disease, sustained by any person or persons and caused by accident.
The unqualified word 'insured' wherever used in this division, and in other parts of this policy when applicable to this division, includes not only the named insured but also (1) under Coverages A and C with respect to the business operations of the named insured, any executive officer of the named insured including the commanding officer or commandant of the activity concerned, the commandant of the naval district or river command, the chief of naval air functional training or other superior administrative authority and the ship's service officer and assistant ship's service officer, while acting within the scope of his duties as such, and (2) under Coverages A and B, any person while using an automobile owned or hired by the named insured and any person or organization legally responsible for such use, and any executive officer of the named insured with respect to the use of a non-owned automobile in the business of the named insured. * * *
The company agrees that the fact that the insured is a government instrumentality will not be interposed as a defense in any lawsuit in which the company's liability under the policy is in any way concerned, unless so requested in writing by the insured.
In no case will such defense be requested of the company by the insured unless and until it has been specifically ...