Appeal from order of Superior Court, Oct. T., 1973, No. 173, affirming judgment of Court of Common Pleas, Trial Division, of Philadelphia, July T., 1969, No. 3638, in case of Aljax Corporation v. Connecticut Mutual Life Insurance Company.
Anthony L. V. Picciotti, with him Dante W. Renzulli, Jr., and Picciotti & Renzulli, for appellant.
J. Shane Creamer, with him Richard E. McDevitt and Montgomery, McCracken, Walker & Rhoads, for appellee.
Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice O'Brien. Mr. Justice Pomeroy concurs in the result. Mr. Chief Justice Jones dissents.
On June 13, 1968, appellee, Connecticut Mutual Life Insurance Company (Connecticut) issued a policy of life insurance in the amount of $150,000 on the life of one John E. Jafolla. The beneficiary of the policy was appellant, Aljax Corporation (Aljax), of which Mr. Jafolla was president.
The policy premiums were to be paid through a system known as the ConnMuMatic Check Service. Under this plan, Connecticut was issued preauthorized checks of Aljax, one of which it deposited each month with its bank in Hartford. The Hartford bank then credited Connecticut's account and sent the check through the Federal Reserve System to be honored by the Girard Bank (Girard) in Philadelphia, where Aljax maintained its account. Girard would then honor the check and debit the amount to Aljax's account. The cancelled check was then sent by Girard to Aljax, along with other cancelled checks and a monthly statement, on the second working day of the following month.
On January 14, 1969, Mr. Calanero, an officer of Aljax, instructed the office manager of Aljax to telephone Girard and direct it to cancel the automatic checking agreement. This was done and a confirming letter was sent by Aljax to Girard the same day. Connecticut, unaware of the cancellation, deposited in its account the check for the January premium on or about January 15, 1969. This check was honored by Girard over Aljax's stop-payment order dated January 14, 1969. When Aljax's bank statement arrived in February, Aljax contacted Girard and notified it that it had paid the check over the stop-payment order and requested reimbursement for the check.
Girard wrote Connecticut a letter on February 13, 1969, notifying Connecticut of Aljax's cancellation of the check service and requesting that Connecticut reimburse Girard for the check that had been paid over Aljax's stop-payment order. This letter was received by Connecticut on February 17, 1969, two days after Connecticut had deposited another preauthorized check, ostensibly for the February premium, on February 15, 1969. Girard honored this second check and again erroneously charged Aljax's account. By a letter dated February 21, 1969, Connecticut sent a check to reimburse Girard for the January 15 check. On February 25, 1969, Aljax was informed that its account had been reimbursed for the January 15 check. Not until March 7, 1969, did Girard discover that it had erroneously paid the February 15 check. On that date, Girard received a letter from Connecticut, explaining that Connecticut had deposited the February 15 check before receiving word that the checking service had been cancelled and requesting instructions as to whether reimbursement would be required for that check.
Meanwhile, on March 5, 1969, Jafolla was killed in a plane crash. On March 17, 1969, the insurance company was advised that a claim would be made by Aljax on the policy. On April 11, 1969, having received no answer from Girard to its letter of March 7, 1969, Connecticut sent a check to Girard to reimburse it for the February check.*fn1 Connecticut also took the position that the Aljax policy had lapsed when it reimbursed Girard for the January 15 check, after receiving notice that the checking service had been cancelled.
Aljax filed suit against Connecticut on the policy, alleging that the payment by ...