Richard C. Angino, Harrisburg, for appellant.
Joseph P. Hafer, Harrisburg, for appellee.
Spaeth, Hester and Montgomery, JJ.
[ 273 Pa. Super. Page 303]
The Appellants appeal from the entry of a judgment in favor of Defendant-Appellee Liberty Mutual Insurance Co., in an action wherein Appellants sought to recover purported losses sustained in a fire to a church building in Harrisburg, Pennsylvania. Both the procedural and the substantive histories of this case are long and complicated. A recitation of the background of the case is appropriate prior to any discussion of the issues raised by the parties.
The record shows that for many years, the congregation of Westminster Presbyterian Church (hereinafter referred to as "Westminster") owned and occupied a church building at Green and Reily Streets in the City of Harrisburg. In May, 1968, Westminster purchased a fire insurance policy on this building from the Appellee, Liberty Mutual Insurance Co. (hereinafter referred to as "Liberty"). The policy was written for an initial term of three years, and in May, 1971, was renewed for an additional three years. Premiums were paid
[ 273 Pa. Super. Page 304]
annually and the last premium was paid by Westminster to cover the period from May, 1972 through May, 1973. Apparently for reasons of declining membership, in August, 1972, Westminster merged into another Presbyterian organization, the Appellant Presbyterian Church of Harrisburg (hereinafter referred to as "Presbyterian"). In the merger, Presbyterian acquired the former Westminster property at Green and Reily Streets. On December 19, 1972, Presbyterian conveyed that property for $9,000 to the Appellant Christ Gospel Temple (hereinafter referred to as "Christ Gospel"). Presbyterian also made a written assignment to Christ Gospel of Westminster's insurance policy with Liberty, for a separate consideration of $750. That amount apparently represented that part of the policy premium paid in advance for the remainder of the annual policy term. In its deed to Christ Gospel, Presbyterian retained an option, for a period of ten years, to repurchase the property for the original sale price if the premises ever ceased to be used for Christian services.
Liberty was not notified by the parties of the merger of Westminster and Presbyterian nor of the sale by Presbyterian of the property to Christ Gospel. Also, Liberty was not notified by the parties of the purported assignment of the fire insurance policy on the property from Presbyterian to Christ Gospel. On February 9, 1973, an agent of Liberty, as a result of a visit to the church, learned of the merger and the later sale of the property and reported these facts to Liberty. Ten days later, on February 19, 1973, fire substantially damaged the church structure.
Liberty denied coverage and Christ Gospel thereafter filed suit against Liberty for the fire loss. Also, Christ Gospel named as a defendant the attorney who had represented Christ Gospel at the time it purchased the premises. The theory of liability against the attorney-defendant was that he had failed to properly secure fire insurance coverage as he had promised his client he would. The attorney-defendant joined Presbyterian as an additional defendant, on the theory that Presbyterian incurred liability to Christ Gospel
[ 273 Pa. Super. Page 305]
for not effecting a valid assignment of the policy. Presbyterian then filed a cross-claim against Liberty, asserting that if Christ Gospel was not covered under the policy, then Presbyterian could recover for the loss since it claimed a continuing insurable interest in the property.
Liberty's defense to the claim of Christ Gospel was that it had not been notified of the merger of the churches and did not agree to the continuation of the policy by Presbyterian, the successor corporation. Further, Liberty contended that even assuming an interest in the policy by Presbyterian, the assignment to Christ Gospel, without the consent of Liberty, was not binding upon the insurer. With respect to the cross-claim filed by Presbyterian, Liberty asserted the lack of notice of the merger, claimed a lack of any insurable interest on the part of Presbyterian, and also argued that Presbyterian had been divested of any interest in the property when it assigned its rights under the insurance policy to Christ Gospel for full and adequate consideration. With respect to the purported assignment of the policy from Presbyterian ...