The opinion of the court was delivered by: RYAN
Three actions were before the Court for trial - two of them, filed as Libels in Admiralty 62 AD 138 and 62 AD 813, were consolidated and tried together first by the Court, for the decision reached in them would determine whether a trial of the third action (64 Civil 431) was necessary. We rendered our decision on the first two libels (and have since made formally stated findings) and proceeded to try the third Action (64 Civil 431), upon which we now file our decision.
The facts underlying the litigation are as follows:
In Libel 62 AD 138, Zeller Marine Equipment, Inc., as owner of the scow Zeller No. 50, sued Schiavone-Bonomo Corporation to recover for damages to the scow which it had chartered on August 18, 1961, to Schiavone-Bonomo and which was returned in a damaged condition on December 8, 1961. It was not disputed that the scow suffered damage when on December 8, 1961, she careened and dumped her cargo at the berth of Charles J. King, Inc. King and Schiavone-Bonomo had on November 21, 1961 entered into a scrap steel sales agreement under which King, the seller, was to load f.o.b., stow and trim the cargo on a scow to be delivered at its dock.
Schiavone-Bonomo pleaded in defense that the scow was unseaworthy and under the control of Zeller (who had supplied the bargee) and that any damage to her was caused not by Schiavone-Bonomo's negligence but by acts of persons over whom it had no control. Then, to protect itself against an adverse finding on its defense of unseaworthiness, Schiavone-Bonomo impleaded King as a Respondent and as the one it alleged to be responsible for the damage by reason of improper loading because, under their sales agreement, it was King's obligation to load and it did load with its own personnel.
Schiavone-Bonomo, as owner of the cargo, also filed a separate libel (62 AD 813) against King for loss of and damage to its cargo. King defended, pleading that the scow had been loaded and trimmed to the satisfaction of the scow bargee - a Zeller employee - at which point King's responsibility ended, that it was ignorant of the cause for the scow's capsizing and entirely free from fault. King cross-claimed against Schiavone-Bonomo for indemnity, asserting breach of an insurance agreement between them, in the event that it is determined that Schiavone-Bonomo had not performed the alleged insurance agreement.
It is not disputed that prior to December 8, 1961 Schiavone-Bonomo and Charles J. King, Inc., had entered into an agreement under which Schiavone-Bonomo agreed to obtain insurance under which King would be a named assured. Insurance was obtained and King was named as an assured, subject to the terms of the policies, "while acting as agent, stevedore or in any other capacity" of the assured Schiavone-Bonomo.
Following the trial of these libels (62 AD 138 and 62 AD 813), we found and concluded that Zeller was entitled to recover from Schiavone-Bonomo as the charterer for the damage to the scow, because the damage was the result of improper loading by King; that Schiavone-Bonomo was entitled to recover over from King for the amount it would have to pay Zeller for damage to its scow; that in addition Schiavone-Bonomo was entitled to recover from King for loss and salvage of its cargo. This conclusion was, however, subject to off-set by King on King's insurance claim against Schiavone-Bonomo. In sum, we concluded that Schiavone-Bonomo was entitled to recover over against King for damages it had to pay Zeller, as well as for its own cargo damage; this was an absolute liability of King unless it was later judicially found that the insurance agreed to be taken out by Schiavone-Bonomo to cover King did not cover King, a question which was to be answered in the trial of action 64 Civil 431.
In this suit (64 Civil 431), King as plaintiff seeks a declaratory judgment against United States Fidelity and Guarantee, Orion Insurance Company, Ltd., Edinburgh Insurance Co., Ltd., and their British underwriters, declaring that it is covered for the losses incurred in the Admiralty suits above described under three policies: Policy No. CGL 280363, Comprehensive General Liability Policy, issued to it by United States Fidelity and Guarantee on November 13, 1961; two Third Party Legal Liability Policies: #117058 issued on December 13, 1960 by the Institute of London Underwriters and #53063 issued on January 3, 1961 by Lloyd's London, to Schiavone-Bonomo in which King is named as an additional insured.
No claim is made by any of the parties that the policies are ambiguous and all agree that King appears as a named insured.
It was stipulated that the record and exhibits in the two related Admiralty actions, as well as other evidence introduced by the parties on the trial of this third action, would constitute the trial record for determination by the Court whether or not the losses as established in the Admiralty actions were covered under the policies.
United States Fidelity and Guarantee's defense rests on two exclusions to the coverage to property damage which exclude coverage for "injury to or destruction of property in the care, custody or control of the Insured or property as to which the insured for any purpose is exercising physical control * * *" and "injury to or destruction of * * * work completed by or for the named insured, out of which the accident arises," and it pleads that the insured King had control of the scow and cargo and that it had completed the loading when she capsized.
The defense of the London and Lloyd's underwriters on their two policies, which are identical in that they cover Schiavone-Bonomo against liability imposed by law or damage arising from the use and operation of scows and unrigged vessels employed in their business of shipping scrap iron and steel, is found in paragraph "6" of the policy which reads: "This policy also covers the interest of the below listed firms (except to the extent of any other valid and collectible insurance) while acting as agents, stevedores, or in any other capacity of the insured; Charles J. King Scrap Iron & Steel Corporation" - a clause which excludes, they say, the losses here because King was "acting in its own behalf" and because it was covered for these losses by United States Fidelity and Guarantee.
The policies are trial exhibits in the record before the Court; they contain the exclusions alleged; there remains to be determined whether on the facts established in the Admiralty actions the ...