The opinion of the court was delivered by: MARSH
This is a non-jury trial of consolidated diversity suits wherein the plaintiffs are Dominick and Rosina Fratto. In their complaints, they seek to recover from each of the defendant insurance companies the total amount of insurance covering the Silver Fox Inn as shown in each fire insurance policy, together with interest from January 2, 1962. The Inn, which was purchased by the Frattos in May, 1961, was destroyed by a fire which occurred on January 2, 1962. In addition to technical reasons, the defendants refused payment of the fire damage on the ground that the plaintiffs were responsible for the fire.
In my opinion, the plaintiffs are entitled to recover in the suits over which the court has jurisdiction. From the evidence, I make the following:
1. Plaintiffs, Dominick and Rosina Fratto, husband and wife, are citizens of Pennsylvania. The defendants are insurance corporations. All are incorporated and have their principal places of business in states other than Pennsylvania.
2. On May 10, 1961, Rosina Fratto purchased for herself and her husband the Silver Fox Inn, located in Foxburg, Clarion County, Pennsylvania, from Crawford Lieberum, Alvin G. Barr, Paul Lieberum and Helen Lieberum, the intervenors. The price was $ 30,000 -- $ 25,000 for the real estate and $ 5,000 for the contents and a liquor license. Mrs. Fratto paid $ 12,000 in cash and for the balance assumed the payment of two mortgages, which were liens against the premises, -- the first, to the Farmers National Bank of Emlenton, and, the second, to Francis J. McGuiness.
3. The intervenors, Crawford Lieberum, Alvin G. Barr, and Paul Lieberum and Helen Lieberum, his wife, are citizens of Pennsylvania, who by deed dated May 10, 1961, granted and conveyed to the plaintiffs the premises known as the Silver Fox Inn, together with the contents thereof and a liquor license. At the time of the conveyance, the unpaid debt of the second mortgage due to Mr. McGuiness was $ 13,792.36. The terms of the second mortgage required the plaintiffs to insure the premises for at least the real debt of $ 15,000. The plaintiffs later defaulted in payment of the second mortgage. Legal proceedings were instituted against the intervenors, as a result of which they were required to pay $ 14,716.01 in satisfaction of the ensuing judgment and costs. This judgment, the second mortgage and accompanying bond were assigned to the intervenors. In this action they assert all the rights, title and interest of the equitable lien of the second mortgage to the extent of $ 14,716.01 on the proceeds of the insurance policies covering the premises. Plaintiffs do not contest the intervenors' rights as against them. However, since Mr. McGuiness was not named in the insurance policies as a mortgagee, the intervenors' rights to the proceeds of the policies issued by the defendant companies rise no higher than the rights of the plaintiffs.
4. At the time of trial Rosina Fratto was 79 years of age and Dominick Fratto was 90 years of age and afflicted with the disabilities of old age. At the time of the purchase of the Inn, Rosina was a quite dominant character. The Frattos had six children.
5. Plaintiffs' son, Philip Fratto, managed an inn on Route 8, south of Butler, which was also owned by the plaintiffs. This inn was named Dino's but was usually referred to as Nick's Inn.
6. On June 28, 1961, Mrs. Fratto procured insurance on the Silver Fox Inn in the amount of $ 50,000. In early December, 1961, her sons, Philip and Samuel Fratto, acting pursuant to her authority, procured additional insurance on the Inn in the amount of $ 87,000.
Prior to obtaining the additional insurance, an appraisal of the premises and contents was made by Industrial Appraisal Company. This appraisal was procured by Philip and Samuel Fratto on behalf and with the approval of their mother.
Industrial Appraisal Company made an on-the-scene visual inspection of the exterior and interior of the Silver Fox Inn. On September 5, 1961, it certified that the actual cash value (net sound insurable value) of the Inn, including contents, was $ 153,025. The actual cash value (net sound insurable value) of the building was certified at $ 137,623, and that of the contents at $ 15,402.
Mrs. Fratto paid for the appraisal and the premiums for the additional insurance.
7. The defendants herein named issued the following policies of fire insurance insuring plaintiffs, trading as Silver Fox Inn:
Company No. Amount
/-- --- /--
Northern Insurance Company of
New York F 340 378 $ 15,000
The Home Insurance Company of
New York 532 12 51 20,000
United States Fire Insurance
Company 21 47 90 10,000
Centennial Insurance Company 19672 10,000
Ohio Farmers Insurance Company 5727 10,000
Scottish Union and National Insurance
Company 53-05-16 10,000
Aetna Insurance Company 81 81 50 10,000
Bankers and Shippers Insurance
Company of New York 132B1559 10,000
Sun Insurance Company K8559344 10,000
Total $ 105,000
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