Orion Insurance v. Firemen's Insurance of Newark

This is an action between two insurance carriers to determine which one shall bear the ultimate loss attributable to the loss of cargo on a ship that sank at sea.

The SS Barcelona was owned by Casa Blanca Steamship Company; it was chartered, on a bare boat charter, to Westhampton Trading Company. (These two companies being hereinafter referred to as the “owners.”) Defendant insured the owners under policies the meaning of which is the chief issue in this case. The vessel was thereafter time chartered to Lineas Navieras de Centro America, S.A. (hereinafter the operator). The operator was insured by plaintiff.

On Januaiy 3, 1963, the Barcelona sank at sea, resulting in the total loss of vessel and cargo. The shippers brought suit against the owners and the operator, in the United States District Court for Florida, recovering judgment against all three companies, with a provision that, because the loss was due to the unseaworthiness of the vessel, the operator had a right of indemnity against the owners. Thereafter, the shippers sued plaintiff in California on the Florida judgment and recovered judgment which plaintiff has paid. Plaintiff attempted, in the California suit,…