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September 12, 1961


Appeal, No. 215, Oct. T., 1961, from judgment of Municipal Court of Philadelphia County, Setp. T., 1957, No. 2170, in case of Arthur Gottesfeld v. Mechanics and Traders Insurance Company. Motion to quash dismissed; judgment reversed.


Joseph H. Foster, with him White and Williams, for appellant.

David S. Malis, for appellee.

Before Ervin, Wright, Woodside, Watkins, Montgomery, and Flood, JJ. (rhodes, P.j., absent).

Author: Flood

[ 196 Pa. Super. Page 111]


In this case the question before us is whether a loss suffered by the plaintiff was covered by the insurance policy issued to him by the defendant.

The plaintiff is a furrier. Late in March, 1955, one LaRosa entered into an agreement with the plaintiff for the delivery of furs to LaRosa on consignment for sale to his customers. The furs were to be returned within forty-eight hours if not sold by LaRosa. If the furs were sold, LaRosa was to pay for them within forty-eight hours at the prices fixed in the consignment memorandum.

During the month following the agreement, there were three transactions under its terms. Two resulted in sales to LaRosa's customers and the plaintiff was paid, while on the third occasion no sale was effected and the fur was returned in accordance with the agreement. Thereafter, on April 26, 1955, two fur coats of

[ 196 Pa. Super. Page 112]

    a value in excess of $5,000. were delivered to LaRosa at the plaintiff's place of business under the agreement. This time he converted them to his own use and neither he nor the fur coats have been heard from since.

It is stipulated that at the time he procured the coats from the plaintiff LaRosa had no intention of returning them or their price to the plaintiff. On the same day, April 26, 1955, LaRosa obtained from several other dealers fur garments, jewelry and clothing on credit, valued in excess of $15,000., which were likewise appropriated and never paid for. It seems clear, therefore, that LaRosa had the intention of converting the coats to his own use when he received them from the plaintiff on the latter's premises on April 26, 1955.

1. The insurance policy issued by the defendant to the plaintiff, and in force on the date of the theft is denominated an "Inland Transit Floater Policy". The body of the policy, however , consists entirely of a series of conditions. The actual coverage is set forth in five endorsements. The principal coverage appears to be contained in the fifth endorsement, entitled "All Risks Transportation Endorsement". This covers all of plaintiff's goods and merchandise in transit within the continental United States and Canada in the custody of a carrier "from the time the goods leave the factory, store or warehouse at initial point of shipment ... until same are delivered at store or warehouse at destination." There follows the clause: "This policy insures, subject to the foregoing provisions, against all risks of loss or damage from any external cause, with the following exceptions: - ". The listed exceptions are of no importance in the decision on this case.

The plaintiff claims that the last quoted clause covers his loss here. Each time he quotes the clause in making this argument in his brief, however, he replaces by asterisks the words "subject to the foregoing provisions". It is hard to imagine any loss whether through

[ 196 Pa. Super. Page 113]

    the hazards of transportation, burglary of plaintiff's premises, or otherwise, that would not be covered by this clause if taken out of context and the words "subject to the foregoing provisions" were deleted. In context, however, the phrase "subject to the foregoing provisions" restricts the coverage to losses in transit in the hands of a carrier, and covers all such losses, whether due to fire, theft, spoilage or otherwise except as limited by the stated conditions. But it clearly does not cover the loss suffered by plaintiff in this case.

2. The court below, in finding for the plaintiff, did not rely upon the above quoted clause, but upon the third endorsement headed "Endorsement or Schedule of Items".

To fully understand this policy all five endorsements must be considered. They can best be considered in reverse order. As we have said, the fifth endorsement discussed above, covering goods in transit in the hands of carriers seems to be the principal coverage. The fourth endorsement has to do only with (1) calculation of the premium, based upon the value of the goods shipped, (2) cancellation, and (3) record of shipments. The first three endorsements give "extended coverage". The first endorsement gives coverage to shipments, by Quaker City Bus Co. under certain conditions, the second to shipment by air or Railroad Express and Greyhound Lines under certain ...

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