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Peterbilt, Mr. Tillman agreed to lease the truck to Indian
Trucking Co., Inc., and he signed a credit application with
Pro Am.
For at least the 1-year period ended December 13, 1990,
Mr. Tillman insured the 1986 Peterbilt with Canal Insurance Co.
(Canal). On July 19, 1990, Mr. Tillman notified Canal that the
truck had been stolen on June 13, 1990. Mr. Tillman’s written
notification states: "When your policy was issued to the Insured
[Mr. Tillman], Insured was the sole and unconditional owner of
the [1986 Peterbilt]." The truck was worth $43,500 at the time
of its theft, and Mr. Tillman’s policy with Canal provided for a
$1,000 deductible on the theft. For Federal income tax purposes,
the truck was fully-depreciated; i.e., Mr. Tillman had no basis
in it.
Later that year, Canal issued a $42,500 check payable to
Mr. Tillman and Michigan National Bank to cover the theft, and
Mr. Tillman, in his stated capacity as owner of the 1986
Peterbilt, transferred his title in the truck to Canal. Pro Am
also certified that Mr. Tillman was the owner of the truck, and
that its security interest in the truck was terminated. On or
about April 1, 1990, Mr. Tillman purchased a 1982 Mack truck for
$8,500, to replace the 1986 Peterbilt.
With respect to the 1988 Peterbilt, Mr. Tillman acquired
that truck in 1987 from Peterbilt Motors Co. (Motors). Motors
issued Mr. Tillman a certificate for it, reflecting that Motors
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Last modified: May 25, 2011