Mutual Trust Co. v. Tollen

9 Pa. D. & C. 251, 1926 Pa. Dist. & Cnty. Dec. LEXIS 46

• Court: Pennsylvania Court of Common Pleas, Delaware County
• Decided: August 4, 1926
• Docket: No. 998
• Status: Published

Opinion

Fronefield, P. J.,

If this case had been submitted to the jury, there was evidence from which they could have found that the defendant, in July, 1922, sold to Samuel Cottier premises No. 8929 Wyalusing Avenue, in the City of Philadelphia, to be clear from encumbrances. The plaintiff insured the title of said premises to Cottier to be marketable and clear from encumbrances, and at the settlement the defendant erroneously assured the plaintiff that the city and school taxes for 1921 had been paid, whereupon, relying upon the assurance of the defendant that the taxes had been paid, the plaintiff, for Cottier, made settlement with the defendant without deducting the amount of the taxes and issued its policy to Cottier. Subsequently, the plaintiff, under the terms of its policy with Cottier, was obliged to, and did, pay the City of Philadelphia the amount of the taxes which had not been paid, and brings this suit to recover from the defendant that amount, with interest.

At the trial, the judge who tried the case non-suited the plaintiff because there was no privity of contract between the plaintiff and defendant.

If Cottier had been the plaintiff, the suit would have been sustained, as he would clearly have been subrogated to the rights of the city: Landreth v. McCaffrey, 17 Pa. Superior Ct. 272; Forrest Home v. Shattuck, 64 Pa. Superior Ct. 239; Hogg v. Longstreth, 97 Pa. 255.

Inasmuch as the proofs sufficiently show that the plaintiff was compelled, by the terms of its policy, to pay the claim for which the defendant was primarily liable, it follows that the right of subrogation as to it is complete.

In Royal Council v. Cornelius, 198 Pa. 46, Mr. Justice Fell said: “One who has been compelled to pay a debt which ought to have been paid by another is entitled to exercise all the remedies which the creditor possessed against the other.”

In O’Donnell v. Neely, 66 Pa. Superior Ct. 351, the plaintiff conveyed to the defendant real estate subject to plaintiff’s bond and mortgage. The taxes became in arrears; the mortgage was foreclosed, and the proceeds of sale did not pay the mortgage after deducting the amount due for taxes, whereupon the mortgagee entered the bond against the plaintiff, who paid the taxes and brought suit against the defendant, in which it was held that undoubtedly the mortgagee could compel Neely to pay the taxes, and, inasmuch as the plaintiff was compelled to pay the mortgagee, he is subrogated to mortgagee’s rights against Neely.

The plaintiff here stands in the same relation to the transaction as O’Donnell did in the above case.

Payment made by the plaintiff direct to the City of Philadelphia does not make it a voluntary payment, because it is a payment which the plaintiff was compelled to make to Cottier, and there is no necessity for Cottier to pay the city and to then proceed against the plaintiff to justify the plaintiff in making the payment: Hogg v. Longstreth, 97 Pa. 255; 25 Ruling Case Law, 1324. The plaintiff was in position to be compelled to, and did, pay a debt for which the defendant was primarily liable: Trust Co. v. Gomeringer, 236 Pa. 179.

The non-suit is hereby taken off.