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SENNETT v. INSURANCE COMPANY NORTH AMERICA (11/12/68)

decided: November 12, 1968.

SENNETT, APPELLANT,
v.
INSURANCE COMPANY OF NORTH AMERICA, APPELLANT



Appeals from order of Court of Common Pleas No. 5 of Philadelphia County, Dec. T., 1962, No. 771, in case of William C. Sennett, Attorney General v. Insurance Company of North America et al.

COUNSEL

Robert M. Taylor, Special Assistant Attorney General, with him Joseph H. Resnick, Assistant Attorney General, and William C. Sennett, Attorney General, for Commonwealth.

Augustus S. Ballard, with him David R. Scott, Alfred W. Cortese, Jr., Barrett Godwin Tawresey, Robert B. Ely, III, and Pepper, Hamilton & Scheetz, for defendant.

Bell, C. J., Musmanno, Jones, Cohen, Eagen, O'Brien and Roberts, JJ. Opinion by Mr. Justice Cohen. Mr. Justice Jones dissents. Mr. Justice Musmanno did not participate in the decision of this case. Dissenting Opinion by Mr. Chief Justice Bell.

Author: Cohen

[ 432 Pa. Page 527]

This proceeding was initiated by petition of the Attorney General of Pennsylvania (Commonwealth) seeking to compel the Insurance Company of North America*fn1 (INA) to pay certain allegedly escheatable

[ 432 Pa. Page 528]

    items of personal property held by it into the State Treasury.*fn2 Although originally the petition referred to eleven different classes of personalty, the present appeals involve only three: (1) uncollected wages, (2) proceeds of uncashed checks and drafts and (3) so-called "deposits" on perpetual fire insurance policies.

The lower court upheld the Commonwealth with respect to certain unpaid wages held by INA ($550.48), gave permission to the Commonwealth to inspect relevant books and records of INA dealing with all three items and otherwise denied the petition. However, in denying the petition the lower court refused to uphold INA's contention that the "deposits" on perpetual fire insurance policies belonged to INA subject to the right of the insured to obtain a refund upon fulfilling certain requirements -- i.e., demonstrating that the single payment really constituted a premium. Instead, it held INA to the latter's own characterization of the fund as a deposit belonging to the insured and held by INA for the insured. On the other hand, since the Commonwealth showed no right in the various insureds to recover these funds, the Commonwealth's claim was denied.

Both parties appealed, the Commonwealth from the denial of its claim and INA "primarily"*fn3 from the

[ 432 Pa. Page 529]

    aforesaid holding of the court below with regard to the nature of the "deposit." Their contentions will be reviewed in connection with the subsequent discussion of each issue, and since the problem of the "deposit" money is the most controversial, we shall discuss that issue first.

Since 1841 INA has written and sold about 35,000 policies of perpetual fire insurance. Under this type of policy the insured, by making a single payment to the insurer, secures insurance coverage for an indefinite period. If he cancels the policy, he is entitled to a refund of a substantial portion of ...


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