The opinion of the court was delivered by: PIERCE
Plaintiffs herein, Navegacion Goya, S.A. (Goya) and American Bulk Carriers, Inc. (ABC), sue pursuant to the admiralty and maritime jurisdiction of this Court, 28 U.S.C. § 1333, to recover under a contract of marine insurance for damage by fire to the S/T KENT (Kent), a vessel owned by Goya and operated by ABC. The complaint demands judgment from the five defendant insurance companies
(collectively, the insurers or underwriters) in an amount totaling $84,500 together with interest thereon.
The defendants do not dispute the execution and delivery of the insurance contract, nor the damage to the Kent. Rather, defendants deny liability under the policy, claiming that the policy was voided by the action of the plaintiffs in changing the flag of the vessel from United States to Panamanian on or about August 4, 1968, during the period of coverage.
The parties have stipulated that the following facts are not in dispute in this action:
1. Plaintiff Goya was from and after August 4, 1968, the owner of the Kent.
2. Plaintiff ABC was at all times relevant to this action the operations manager of the Kent.
3. Corsair Transportation Corp. (Corsair) was at all relevant times prior to August 4, 1968, the owner of the Kent.
4. The defendants are corporations engaged in the insurance business each with a principal place of business in the United States of America.
5. For the period commencing September 1, 1967, and ending August 31, 1968, Corsair and ABC, as Managers, through John P. Tilden Ltd., insurance brokers of 100 William Street, New York, N.Y., caused the Kent, her hull, machinery, etc., to be partially insured under Policy No. JPT 67 -- 252 to the extent of the fraction of the amount insured thereunder, $262,500 over the agreed valuation of vessel $1,750,000, against the risks specified in said policy. The defendants' subscriptions to the said policy were as follows:
Mutual Boiler & Machinery
Insurance Company $52,500
American Manufacturers Mutual
Insurance Company $52,500
Stuyvesant Insurance Company $43,750
St. Louis Fire & Marine
Insurance Company $43,750
Jefferson Insurance Company $35,000
Total amount insured
by defendants $227,500
The remaining $35,000 of Policy No. JPT 67-252 was subscribed by Maryland National Insurance Company. Policy No. JPT 67 -- 252 was issued through the said brokers John P. Tilden, Ltd. in New York. It bears the date October 10, 1967 and the assureds named therein are Corsair and ABC, as Managers for account of themselves, but subject to the provision of this Policy with respect to change of ownership. The remaining $1,487,500 of the agreed valuation of the $1,750,000 was insured in London by British underwriters.
6. All premiums with respect to Policy No. JPT 67-252 have been paid.
7. On or about August 4, 1968, ownership of the Kent was transferred to plaintiff Goya and her flag was changed from United States to Panamanian.
8. Corsair and Goya were affiliated and/or interrelated companies within the meaning of JPT 67-252 in that, inter alia, the ultimate shareholder of each corporation was Samuel H. Wang.
9. On August 14, 1968, New York time Goya and ABC sent John P. Tilden, Ltd. a letter stating that the Kent had been sold from Corsair to Goya on August 4, 1968, ...