Hanover Fire Ins. of New York v. Merchants' Transp. Co.

This was an action on a protection and indemnity poliey of insurance. The policy was issued November 21, 1923, by the Hanover Fire Insurance Company of New York, in favor of the Merchants’ Transportation Company, and covered a fleet of four vessels, of which the T. W. Lake was one. The policy ran for a term of one year from date, and provided indemnity, among other things, for loss of life which the insured should become liable to pay and did pay during the term. . The amount of the insurance or indemnity as to the Lake was limited to $13,500, but it was provided that, if the liability of the assured for loss was *947 contested with the consent in writing of the insurer, the.latter would pay a portion of the costs of the defense.

December 5,1923, or about two weeks after the issuance of the policy, the Lake foundered and sank in Puget Sound, resulting in the loss of the vessel and her entire crew. Claims were thereupon made upon the transportation company for damages for death by wrongful act, by the personal representatives of some of the members of the crew, and the transportation company immediately filed a petition for limitation of its liability under the federal statute,…