92 F. 517 | S.D.N.Y. | 1896
On the settlement of the decree a further question is presented whether the defendant is liable to make good as a part of the loss, the libelant’s expenses in defending the
In the case of Xenos v. Fox, L. R. 3 C. P. 630, on a policy insuring the ship Smyrna, but containing also a rupning-down clause, that is, covering any liability of the ship for running down another vessel, it was held that the costs and counsel fees incurred by the owners of .the Smyrna in successfully resisting a damage claim for collision could not be recovered under the policy. But this was put upon the ground that the collision liability was a wholly independent subject of contract, and that the terms of this part of the contract couid not be made to include such costs, the agreement of the insurers being only to pay a certain “proportion of what the assured should pay in pursuance of any judgment recovered.” Manifestly that agreement did not embrace the costs of a successful defense, since there was no payment under any judgment recovered.
In the present case, the policy declares that the insurers are “to fully indemnify the assured for loss and damage arising from or growing out of any accident caused bj' collision,” etc., “for which said steam tug or its owners may be legally liable.” This clause, I think, embraces the necessary expense^ of the suit which the insured was by the policy required to resist, in order that the liability of the steam tug for the accident might be legally determined. The owners are “legally liable” for those expenses. The expenses are also a “loss and damage” necessarily growing out of the accident, because the policy requires those expenses to be incurred before any claim can be made under the policy. The case in this regard differs from the numerous class in which such expenses are disallowed, as having been voluntarily incurred, and hence at the suitor’s risk. Unless the insurers pay the expenses- of the suit, which they have themselves required, they do not keep their agreement “to fully indemnify the assured” for this item of “loss and damage growing out of the accident.”
The subsequent clause does, indeed, say that the company shall not be liable unless the liability of the said steam tug for such loss or damage shall be determined by a suit at law, etc.; and the first description of the insurance is also “against such loss or damage as the steam tug may become legally liable for.” If the intent of the policy was to limit the company’s liability to charges for loss and damage which were a lien upon the tug, the expenses and counsel fees incurred in resisting the suit evidently would not be covered by the policy; for such charges, incurred by the owners, are no lien upon the tug.
I do not think, however, that the phrase “liability of the steam tug” is used in this policy in this specific sense; for the main body of the policy that sets forth specifically what the insurers are “content to bear and take upon themselves,” states that the “insurance is to fully indemnify the assured for loss and damage growing out of any accident,” etc., “for which said steam tug, or its owners, may be legally liable.” This is an express extension of the insurance beyond what constitutes a lien on the vessel, to any and every personal
The expenses are allowed.
On further argument I am satisfied that the counsel fees incurred by the assured in defending the suit are not within the terms of the policy, and cannot be constructively included within its intention. Such expenses are, therefore, disallowed.