206 Pa. 428 | Pa. | 1903
Opinion by
The Equitable Trust Company on May 15, 1898, delivered to plaintiff, executrix of Charles Wheeler, deceased, a policy of title insurance in the amount of $50,000. The subject insured was a mortgage for $61,500, made by John D. Pharoah, on seventeen ground rents issuing out of seventeen lots and buildings.thereon, situate on Douglas street in Philadelphia. This mortgage was taken by plaintiff as collateral security for a loan. It is not alleged that there is any defect in the title to the ground rents which has rendered them unmarketable. The policy stipulates that defendant “ will indemnify, keep harmless and insure the said Susan Farnum Wheeler, executrix, .... against all loss or damage not exceeding fifty thousand dollars,” arising from defects or unmarketableness of title or loss as described in schedules A and B, which are set out in and form part of the policy. In a note to schedule B occurs this statement:
“ Note. — The completion of seventeen buildings on said lots of ground in accordance with the plans and specifications filed with this company by John D. Pharoah within nine months of the date hereof (unless destroyed by fire) together with all municipal — John H. Connellan — improvements free of municipal liens is hereby guaranteed.”
Pharoah, who had mortgaged the ground rents to plaintiff for a loan to him, having defaulted in payment of the rents, the mortgage was foreclosed and the ground rents purchased at sheriff’s sale by Richard M. Elliot for Mrs. Wheeler, the price at which they were knocked down being only $500. The plaintiff then brought suit against the trust company for damages sustained by her by breach of the conditions of the policy of insurance. The breach averred by her was of the stipulation in the note to schedule B as heretofore quoted, in that, the houses, as she averred in her statement, were not completed according to the plans and specifications filed with the trust company by John D. Pharoah.
“ I offer to show that the seventeen houses on Douglas street, between Foster and Arch streets, west of Thirty-second, were not built in accordance with the plans and specifications, filed with the Equitable Trust Company in accordance with the policy, by John D. Pharoah, and the cost necessary to make those houses conform to those plans and specifications.”
This was objected to by defendant, on the ground that the evidence was irrelevant, and on the further ground, that witness had made no examination of the houses, until some time after the policy was issued. The court sustained the objection. Plaintiff declined to offer further evidence and thereupon the court directed a nonsuit, which it afterwards refused to take off and we have this appeal by plaintiff assigning for error the rejection of the testimony of Loughran.
Whether this testimony was relevant, depends upon a proper construction of the policy. Was it an indemnity against loss or damage by a failure of the mortgage as security ? Or was it a guarantee for completion of the buildings as specified in the note to schedule B ? If the latter, the testimony was relevant ; if the whole instrument was merely a covenant to indemnify against loss or damage, then the testimony when offered was irrelevant and properly rejected. The policy in its general terms is one of indemnity. In the commencement clause it says : “ The Equitable Trust Company in consideration of the sum of $1,125 to them paid by Susan Farnum Wheeler, etc., do hereby covenant that they will indemnify, keep harmless” her against all loss and damage not exceeding $50,000 which the insured shall sustain by reason of any defects in or unmarketability of the title to the property which is the subject of the mortgage. Excepting, however, defects, liens and incumbrances specified in schedule B. These are listed thus : accuracy of description, taxes of 1898, water rents, building restrictions, mechanics’ liens not of record. Then follows the note which guarantees the completion of the seventeen buildings within nine months from the date of the policy,
But the contract is not intended by its terms to be severed into two, one to indemnify against loss from defects of title and one to guarantee, that the buildings shall be finished in accordance with certain plans and specifications. If the contract were one of guarantee, then the plaintiff, although she may have lost nothing on her collateral, instead may really have largely profited by the sale of it, would have a right to recover; on the other hand if the contract were one of indemnity alone, she could not recover unless she proved a loss on the mortgage. This is the substance of the decisions in Wheeler v. Real Estate Title Ins. & Trust Co., 160 Pa. 408, and Seymour v. Tradesmen’s Trust, etc., Co., 203 Pa. 151. We hold that this policy, taking it as a whole, is a contract of indemnity and recovery can be had on it only as such.
The plaintiff avers that the houses were not completed according to the plans and specifications and that their value in consequence has depreciated in the sum of 115,174, but she does not aver any loss on the mortgage which she took as collateral for her loan; she bought' in all the ground rents and now owns them; for anything that appears, they may be worth far more than the mortgage and she may be largely the gainer,
This was in effect the ruling of the learned trial judge when he says: “ If any loss is shown the plaintiff will be entitled to show the condition of the buildings in accordance with the German-American Co. v. Citizens Tr. & Surety Co., 190 Pa. 247, and show the difference in their value as they were, and as they would have been had they been completed according to the specifications.”
In view of what we have said, we think the court below properly held, that at that stage of the trial Loughran’s evidence was irrelevant and therefore rejected it. This being the only assignment of error it is overruled and the judgment is affirmed.