The opinion of the court was delivered by: MURPHY
This is an action brought by purchasers of war surplus property on a valued policy of marine cargo insurance for the destruction by fire of such goods while in custody of the vendor in its structure. The cause having been tried by the court without a jury, the following are made by the court as
1. At all the times referred to in the complaint: plaintiff, Hillcrea Export & Import Co., Inc., was and is a Delaware corporation; plaintiffs, Bristol-King Co., Inc., and Bachrack Bros., Inc., were and are New York corporations, and defendant, Universal Insurance Company, was and is a New Jersey corporation.
2. The matter in controversy, exclusive of interest and costs, exceeds the sum of $ 3,000.
3. Prior to September 5, 1946, the Hillcrea Corporation received from the Surplus Property Office a circular listing merchandise which had been declared surplus and which was described as unused on the Aleutian Islands.
4. On September 5, 1946, the United States Government, through the director of surplus property for the Department of the Interior, signed an agreement in Washington, D.C., with the president of the Hillcrea Export and Import Corporation, which provided among other things that:
(a) '(T)he vendor, will sell to Hillcrea Export and Import Corporation, the purchaser, surplus property consisting principally of clothing, of all types and conditions, located on the Aleutian Chain of Islands of a declared cost not to exceed $ 493,000 at and for a price of twenty (20) percent of declared cost.'
(b) The agreement being one 'In furtherance of the foreign relief program' the property 'shall be of a type suitable and available for sale to relief agencies for actual relief purposes as determined by the vendor's representative, toward which sale the purchaser agrees to exert every effort', but 'such property as remains unsold after all reasonable possibility of sale to relief agencies has ceased to exist may be sold in the continental United States, such sale being made only after consultation with the War Assets Administration.'
(c) 'The purchaser shall, upon delivery to it of this contract, deliver to the vendor a certified or cashier's check, payable to the Treasurer of the United States in the amount of $ 100,000 to be disbursed as follows: In view of the presence of ships at Adak and those enroute on charter to the purchaser, it is agreed that available property on the above islands will be delivered to such ships at such of the above islands as they may touch. Payment of the vendor for the value as computed above of the property delivered at any of the above islands, as determined by the representative of the vendor, shall be by book withdrawal from the above fund, any overage being payable immediately by purchaser, the vendor returning to purchaser any part of the fund not expended as aforesaid.'
(d) 'It is expected that the Government agency in possession will exercise its usual care for the protection of the property, but the Government will not be liable in the event of loss, damage, or destruction from any cause whatsoever. The Government, however, will refund to the purchaser any amount Aid with respect to property lost or destroyed during the period allowed for removal and prior to actual removal.'
(e) The Government 'reserves the right to withdraw from sale any property prior to the removal thereof without incurring any liability except to refund to the purchaser any amount paid with respect to such property.'
5. By a cashier's check dated September 12, 1946, payable to the Treasurer of the United States, for which payment was received on September 20, 1946, plaintiffs delivered to the vendor the sum of $ 100,000 specified in their contract.
6. Prior to November 25, 1946, plaintiffs Bristol-King, Inc., and Bachrack Bros., Inc., together, acquired a one-half interest in said contract of September 5,1946, and the remaining one-half interest continued to be owned by plaintiff Hillcrea Export & Import Co., Inc.
7. On November 25, 1946, defendant delivered to plaintiffs in New York an open marine insurance policy No. 14381, which provided so far as relevant in this case with respect ...