Appeal from the Order of the Court of Common Pleas, Philadelphia County, Civil Division, at No. 3663 September Term, 1983.
Charles A.J. Halpin, III, Philadelphia, for appellant (at 1418) and appellee (at 1670).
Peter J. Mooney, Philadelphia, for appellant (at 1670) and appellee (at 1418).
Manfred Farber, Philadelphia, for appellee.
Brosky, Beck and Cercone, JJ. Cercone, J., files a concurring and dissenting opinion.
[ 381 Pa. Super. Page 290]
This is a consolidated appeal from an order denying appellant, Deborah Sue Shockley's, and cross-appellant, Tornetta Pontiac's, requested post-trial relief. Appellant Shockley sought recovery under an auto insurance policy issued by appellee, Harleysville Mutual Insurance Company, when the vehicle she had purchased from appellee/cross-appellant Tornetta Pontiac was destroyed in a fire.
At issue is, (1) whether appellant held an insurable interest in the vehicle where it had been stolen from its original owner but was purchased in good faith from Tornetta; (2) whether appellant's recovery from Tornetta for breach of warranty of title affects her ability to recover from appellee on the insurance policy. Tornetta argues, on cross-appeal, that it is entitled to subrogate itself to insurance proceeds received by appellant by virtue of paying appellant for her loss pursuant to the breach of warranty of title suit. We reverse the order appealed from to the extent it denies appellant Shockley's requested relief.
The facts relevant to our discussion are: appellant purchased a vehicle from Tornetta Pontiac and purchased insurance coverage for the vehicle from appellee Harleysville. Sometime later the vehicle was completely destroyed in a fire. Upon investigation of the accident police discovered that the vehicle had been stolen from the original purchaser and eventually sold to Tornetta through a dealer exchange. A false title and vehicle identification plate had facilitated the seemingly legitimate sale of the vehicle.
Appellant sued Tornetta, claiming damages in theories of tort and breach of warranty of title, and subsequently obtained a default judgment. In settlement of the judgment, appellant received cash and satisfaction of her outstanding liability on the purchase. The settlement to appellant completely covered her loss. Appellant subsequently sued appellee Harleysville after appellee refused to pay her for the fire damage. Appellant sought payment under the
[ 381 Pa. Super. Page 291]
insurance contract and Tornetta intervened seeking subrogation of any insurance proceeds. The trial court denied both appellant and Tornetta, although it awarded appellant the sum she had paid for the insurance coverage.
Appellant's ability to recover under the insurance contract is first predicated upon there being a valid contract of insurance. This in turn, among other things, depends upon appellant having an "insurable interest" in the vehicle. We must agree with the trial court that appellant possessed such an interest. In Luchansky v. Farmers Fire Insurance Company, 357 Pa. Super. 136, 515 A.2d 598 (1986), a panel of this court recited the generally accepted rule that anyone who will derive pecuniary benefit or gain from the preservation or continued existence of the property or who will suffer pecuniary loss from its destruction has an insurable interest. It is also sufficient if the individual has a reasonable expectation of benefit from preservation of the property. Having perfect legal title is not necessary. Clearly under this authority appellant had an insurable interest in the vehicle.
To all parties involved, and up until the vehicle was discovered to be a stolen vehicle, the transactions of purchasing the vehicle and insurance coverage on it were indistinguishable from any other purchase transactions. Appellant paid valuable consideration for the vehicle and stood to suffer the normal consequences should it be destroyed. The loss of its use and the dilemma of replacing it or its services. The fact that it had been stolen from its original owner affected appellant's right of possession and enjoyment only with regard to the true owner as her title as a bona fide purchaser for value was superior to all but the true owner's. Had the stolen nature of the vehicle remained undiscovered, appellant presumably would have continued using the vehicle and making payments on it. Furthermore, upon its ...