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ROBERT P. KANE v. INSURANCE COMPANY NORTH AMERICA ET AL. (CROSS APPEALS) (09/28/78)

decided: September 28, 1978.

ROBERT P. KANE, ATTORNEY GENERAL OF THE COMMONWEALTH OF PENNSYLVANIA
v.
INSURANCE COMPANY OF NORTH AMERICA ET AL. (CROSS APPEALS)



Appeals from the Order of the Court of Common Pleas of Philadelphia County in case of Robert P. Kane, Attorney General of the Commonwealth of Pennsylvania v. Insurance Company of North America, Indemnity Insurance Company of North America, Life Insurance Company of North America, Parkway Company, Philadelphia Investment Corporation, General Traffic Service Co., Inc., National Security Insurance Company, and All of the Owners or Beneficial Owners for whom they hold unclaimed funds or property, No. 771 December Term, 1962.

COUNSEL

Marvin I. Block, Assistant Attorney General, with him Michael Von Moschzisker, Deputy Attorney General, and Robert P. Kane, Attorney General, for Robert P. Kane.

Robert B. Ely, III, with him Barrett Godwin Tawresey, for Insurance Company of North America, et al.

President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Blatt and DiSalle. Opinion by President Judge Bowman.

Author: Bowman

[ 38 Pa. Commw. Page 43]

Almost as hoary as the intangible personal property which is its subject, this escheat proceedings initiated in 1966 by the Attorney General (Commonwealth) against the Insurance Company of North

[ 38 Pa. Commw. Page 44]

America and several of its subsidiaries (INA) is before us on cross appeals from an order of the lower court of January 11, 1977 dismissing the Commonwealth's petition for escheat as to one class of property and granting in part and dismissing in part its claim to a second class of property.

The lower court so ordered after remand to it by the Supreme Court for further proceedings consistent with an opinion and order of the Supreme Court in Sennett v. Insurance Company of North America, 432 Pa. 525, 247 A.2d 774 (1968).

Germane to the remand and to these cross appeals, the Supreme Court affirmed a prior order of the lower court permitting further Commonwealth inspection of INA books and records but vacated the lower court's order declaring as not subject to escheat*fn1 two classes of intangible personal property in controversy, namely (a) the proceeds of uncashed checks and drafts issued by INA, and (b) "deposit" payments by insureds under 850 policies of perpetual fire insurance, which second class is divided into two subclasses consisting of 830 policies on property no longer owned by the insureds and 20 such policies on property which apparently had been demolished or destroyed by other casualty. For want of an adequate evidentiary record the Supreme Court declined to pass upon these classes of personal property as subject to escheat -- or payment into the State Treasury without escheat -- and reasoned that further investigation might establish a factual foundation for the legal issues raised.

Upon remand the Commonwealth conducted a further investigation of INA books and records but produced

[ 38 Pa. Commw. Page 45]

    no additional factual information relevant to its claim; however, the parties did stipulate certain additional facts. Upon the original record made and these stipulated facts after remand the lower court issued its order and a comprehensive opinion including findings of fact and its conclusions of law. Its findings of fact are not disputed in these cross appeals.

We shall first consider the cross appeals as they relate to deposits paid to INA by insureds with respect to 850 perpetual fire insurance policies. As noted above, the deposits paid by insureds with respect to these policies consist of two subclasses (a) deposits as to 830 of such policies, the insured property of the policy being no longer owned by the insured, and (b) deposits as to 20 of such policies, the insured property having been demolished or destroyed by other casualty. The lower court held that the deposits paid to INA as to the first subclass were not subject to escheat or payment in the State Treasury without escheat while the deposits paid to INA as to the second subclass were.

In so concluding the lower court reasoned that the perpetual fire insurance policies in question which provided that "in case of sale of the property insured, if the deposit money be not demanded within sixty (thirty or ninety) days after the sale, it shall be considered as sunk for the benefit of the Company" (emphasis added) for want of demand by the insured within the prescribed time after sale vested title to the deposit in INA, whereas the right to demand refund of the deposit remains in the insured even though the property ...


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