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UNITED STATES NATIONAL BANK JOHNSTOWN v. RELIANCE INSURANCE COMPANY (12/13/85)

filed: December 13, 1985.

UNITED STATES NATIONAL BANK IN JOHNSTOWN, APPELLANT,
v.
RELIANCE INSURANCE COMPANY, APPELLEE



Appeal from the Judgment entered December 3, 1984, in the Court of Common Pleas of Allegheny County, Civil No. G.D. 82-10045.

COUNSEL

E.J. Strassburger, Pittsburgh, for appellant.

Danial J. Weis, Pittsburgh, for appellee.

Olszewski, Popovich and Montgomery, JJ.

Author: Olszewski

[ 348 Pa. Super. Page 31]

This is an appeal from the judgment of the lower court following a jury trial in which appellant was denied payment under an insurance policy issued by appellee. Appellant

[ 348 Pa. Super. Page 32]

    contends that the Clause E, Blanket Bond Policy*fn1 provided for coverage for the defaulted bank loan of Summit Mines Company, owned by Clifford L. Jones and Harold P. Walters, since the signature of Mrs. Jones, wife of co-owner Clifford Jones, was forged. The case presents no contested issue as to the amount of loss or to the authenticity of the signature. The only question is that of determining the effect of the clause fixing liability.

The disputed clause of the insurance policy is contained in a blanket bond, which covers any losses sustained by the bank as a result of a loan given on the faith of a forged signature of a guarantor. The clause, however, was not meant to cover all situations in which there are forged documents. Certain facts must be present to apply the policy. In light of our review of the evidence, we find that the policy does not apply in this situation and we therefore affirm the lower court.

Clause E of the policy is a standard clause that is regularly used. See Fields, Bankers Blanket Bonds: What They Cover and What They Do Not, Ins.Counsel J. 318; Posey, Recent Trends in Clause E Cases -- Bankers Blanket Bonds, 33 Ins.Counsel J. 87. See also, Continental Bank v. Phoenix Insurance Co., 24 Cal.App.3d 909, 101 Cal.Rptr. 392 (1972); St. Paul Fire and Marine Insurance v. Leflore Bank and Trust Company, 181 So.2d 913, 254 Miss. 598 (1966). Despite the clause's popularity, the particular problem before us today is unique to Pennsylvania courts. California, however, has decided a case almost directly on point which was relied upon by the trial court judge in denying appellant's motion for judgment n.o.v. and motion for a new trial. Continental Bank v. Phoenix Insurance Co., supra, turned on facts strikingly similar to those sub judice. So, too, were the allegations of error and contentions

[ 348 Pa. Super. Page 33]

    of the appellee. As we propose to do now, the California appellate court upheld the jury verdict in favor of the insurance company.*fn2

Upon review of the evidence, Reliance, as verdict winner, is entitled to the benefit of every fact and every reasonable inference of fact arising therefrom, as well as having the evidence viewed in a light most favorable to it and any conflict arising from the evidence resolved in its favor. See Jones v. Three Rivers Management Corporation, 483 Pa. 75, 394 A.2d 546 (1978); Fannin v. Cratty, 331 Pa. Super. 326, 480 A.2d 1056 (1984); Amerofina, Inc. v. U.S. Industries, ...


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