Edward G. Budd B. & L. Assn. v. Kinsella

• Decision Date: 15 April 1931
• Docket Number: 85-1930
• Citation: 102 Pa.Super. 248,156 A. 577
• Parties: Edward G. Budd B. & L. Assn., Appellant, v. Kinsella et al
• Court: Pennsylvania Superior Court

156 A. 577

102 Pa.Super. 248

Edward G. Budd B. & L. Assn., Appellant, v. Kinsella et al

No. 85-1930

Superior Court of Pennsylvania

April 15, 1931

Argued October 15, 1930

Appeal by plaintiff from order of C. P., No. 5, Philadelphia County June T., 1929, No. 16614, in the case of Edward G. Budd Building and Loan Association v. Ronald J. Kinsella and The Pennsylvania Fire Insurance Company.

Rule for judgment for want of sufficient answers to interrogatories in an attachment execution. Before Martin, P J.

The facts are stated in the opinion of the Superior Court.

The court discharged the rule. Plaintiff appealed.

Error assigned, among others, was the order of the court.

Appeal dismissed and the record remitted for further proceedings.

Samuel L. Borton, and with him Walter E. Schembs, for appellant.

Horace Michener Schell, for appellee.

Before Trexler, P. J., Keller, Linn, Gawthrop, Cunningham, Baldrige and Whitmore, JJ.

OPINION

Cunningham, J.

The proceeding below was attachment execution under which plaintiff sought to attach in the hands of The Pennsylvania Fire Insurance Company the sum of $ 204.75 alleged to be due from it to defendant, its insured, as an unearned or return premium. The question now involved is whether plaintiff was entitled to a summary judgment against the garnishee upon its answers to plaintiff's interrogatories. Deeming the answers legally insufficient to prevent judgment, plaintiff obtained a rule which the court below discharged and it thereupon appealed to this court.

We gather from the pleadings that the controversy arose out of these circumstances: On March 10, 1928, Ronald J. Kinsella, the defendant, being the owner of a property in Upper Darby Township, Delaware County, occupied as a store and apartments, gave his bond, secured by a mortgage thereon, in the sum of $ 7,000 to the Edward G. Budd Building and Loan Association, plaintiff in the attachment and appellant herein. At the same time, The Pennsylvania Fire Insurance Company, garnishee and appellee herein, issued to Kinsella its policy upon the property insuring him against loss by fire for a term of ten years for a premium of $ 243.13; the policy, which contained a standard mortgagee clause (beginning: "Loss or damage, if any, under this policy, shall be payable to Edward G. Budd Building Association as mortgagee [or trustee], as interest may appear," etc.), was placed in the possession of the association as mortgagee. No assignment of the policy was ever made by the insured. Kinsella having defaulted upon his bond and mortgage, judgment was entered against him in Delaware County upon the bond on March 4, 1929, damages being assessed at $ 7,681.43; an execution issued with the result that the property was sold by the sheriff to plaintiff for $ 50 and the sheriff's deed to it was acknowledged May 2, 1929. By this change in the title to the property insured, which occurred as of the date of the acknowledgment and delivery of the sheriff's deed (Collins v. London Assurance Corp., 165 Pa. 298, 30 A. 924), Kinsella's insurable interest therein ended. Plaintiff forwarded the policy to the insurance company, where it now remains, and demanded payment of the unearned premium thereon, which, if the company is liable therefor, amounts to $ 204.75. Subsequently, an exemplification of its deficiency judgment was filed by plaintiff in the court below and an attachment execution issued against Kinsella, in which the insurance company was named as garnishee.

The material interrogatory was whether the garnishee had in its possession when the writ was served "any return premium on cancelled insurance policy No. 107088 . . . . due the defendant, and, if so, . . . . the amount of the same." In its answers the garnishee admitted the issuing of the policy to defendant with a mortgagee clause in favor of plaintiff; the purchasing of the property by plaintiff at sheriff's sale; and the forwarding of the policy to the garnishee by plaintiff. The averments of the answer which raise the questions now for disposition were: "The said Edward G. Budd Building and Loan Association has no legal right, power or authority to cancel the said policy of insurance and no request for the cancellation of the said policy has been made by the assured therein named, to wit, Ronald J. Kinsella; if there had been any cancellation of the said policy, which garnishee denies, the return premium as of the date of the sheriff's sale is in the sum of $ 204.75. . . . . The said policy of insurance by reason of the sheriff's sale of the said premises and the execution and delivery by the sheriff of Delaware County to the Edward G. Budd Building and Loan Association of a deed for the premises has become and is void, as in and by the policy of insurance . . . . it is provided, inter alia, as follows: 'This entire policy shall be void, unless otherwise provided by agreement in writing added hereto . . . . (c) if, with the knowledge of the insured, foreclosure proceedings be commenced, or notice given of sale of any property insured hereunder, by reason of any mortgage or trust deed.' . . . . Neither at the time the writ . . . . was served nor at any time since has the defendant claimed from the garnishee any money or property on any account whatsoever, and there is no debt or demand in suit. . . . . It avers that by reason of the circumstances hereinbefore set forth its policy of insurance No. 107088 became null and void . . . . and further avers that the said Ronald J. Kinsella the defendant has never tendered the policy of insurance to the garnishee for cancellation or requested cancellation thereof, and is advised by counsel that said policy having become void no cancellation thereof could be had if requested; that it is informed that the premium for the said insurance was paid by the said Ronald J. Kinsella when the said policy of insurance was obtained and that by reason of the facts in this answer set forth it has nothing in its possession belonging to the said Ronald J. Kinsella." The general effect of the answers was that, as the risk had attached, liability for the return of a part of the premium could arise only in the event of cancellation of the policy in accordance with its provisions therefor, and that it had not been cancelled but had been rendered void through the conduct of the insured in defaulting upon the mortgage and thus bringing about the foreclosure and change in title.

Plaintiff by its writ, has stepped into the shoes of the insured and our inquiry is whether, under the facts as set forth in its answer, the insurance company was indebted to Kinsella in the amount of the unearned premium at the time the writ was served. It is apparent that issues both of law and of fact are raised by the answers. The question of law, whether the garnishee is relieved from all liability for the unearned premium because, as it contends, the policy became void by reason of the foreclosure proceedings, has not been ruled by the cases cited on either side. Its importance is obvious when attention is directed to the large number of foreclosure proceedings in which mortgagees are obliged to buy in the mortgaged premises. Some reference to the cases relied upon by counsel may, therefore, be justifiable at this point. The case of Rafsnyder's Appeal, 88...