J. Webster Jones, Philadelphia, for appellant.
Harry A. Rutenberg, Philadelphia, for appellees.
Before Rhodes, P. J., and Hirt, Reno, Ross, Wright and Woodside, JJ.
[ 174 Pa. Super. Page 491]
The plaintiffs are common carriers engaged in commercial hauling. In October 1947 they bought a new 'Great Dane 31-foot van semi-trailer' for $3,250 from Chester Mack Sales and Service Inc. They made a down payment of $900 and entered into a bailment lease with the sales company providing for the payment of the remaining purchase price in installments. There was a financing charge amounting to $881.50 which was added to the original cost of $3,250. The credit of the down payment left a balance of $3,231.80 which the plaintiffs agreed to pay, by the terms of the lease, in 23 monthly installments of $150.81 and a final payment slightly higher in amount. After its execution the lessor sales company assigned the lease to Industrial Credit Company. Thereupon the title to the trailer issued in plaintiffs' name was delivered to that finance company with a notation of the encumbrance of the lease endorsed thereon.
On July 14, 1948, the plaintiffs directed one of their driver-employes to make a delivery of goods by means of the above trailer to Federalsburg, Maryland, and thence to Geneva, New York, with instructions then to return the trailer to Wilmington, Delaware. The driver feloniously converted the trailer to his own use and that was the last seen of him. A year or more later the trailer was found in a damaged condition in Salt Lake City, Utah. It was there recovered by Industrial Credit Company and later sold.
For a premium of $872 paid to it, the defendant Commonwealth Mutual Fire Insurance Company of Pennsylvania issued its policy to the plaintiffs insuring them for the period of two years from October 31, 1947 against 'Loss of or damage to the Automobile
[ 174 Pa. Super. Page 492]
caused by Larceny, Robbery or Pilferage' within $3,000, the limit of the liability assumed. The policy contained a loss-payable clause in the following form: 'Any loss hereunder is payable, as interest may appear, to the Insured, and Industrial Credit Corp. * * *'
The undisputed evidence is that plaintiffs were not in default when the trailer was taken from them on July 14, 1948; it follows therefore that plaintiffs' monthly payments to Industrial Credit Company up to that date totaled $1,207.64. Since plaintiffs were then deprived of possession of the trailer they paid nothing further on the lease. In this action they sought to recover from the defendant the value of their interest in the trailer at the time of the theft. The total amount of the monthly installments actually paid by plaintiffs together with the initial hand payment of $900 amounted to $2,107.64. Plaintiffs had spent an additional $500 in adapting the trailer for the transportation of frozen foods. Plaintiffs' testimony is undisputed that its value when stolen was $3,400.
On repossessing the damaged trailer in Salt Lake City the finance company was obliged to make necessary repairs which, with the cost of returning the equipment to Chester, Pennsylvania, amounted to $991.54. The amount realized by the finance company on the subsequent sale of the trailer was $2,000. The defendant insurer accordingly was entitled to a credit of the sum of $1,008.64 (the net salvage realized by the finance company) against $3,000, the limit of the policy, reducing the maximum liability of the insurer to $1,991.54. Accordingly, although ...