Poe v. Philadelphia Cas. Co.
| Decision Date | 12 June 1912 |
| Citation | 84 A. 476,118 Md. 347 |
| Parties | POE et al. v. PHILADELPHIA CASUALTY CO. |
| Court | Maryland Court of Appeals |
Appeal from Circuit Court of Baltimore City; Chas. W. Heuisler Judge.
Bill by Edwin W. Poe and others, receivers of the United Surety Company, against the Philadelphia Casualty Company. Bill dismissed on demurrer, and plaintiffs appeal. Affirmed.
Argued before BOYD, C.J., and BRISCOE, PEARCE, BURKE, THOMAS, URNER and STOCKBRIDGE, JJ.
Stuart S. Janney, of Baltimore, for appellants.
Benjamin A. Stansbury and Washington Bowie, Jr., both of Baltimore for appellee.
This is an appeal from a decree of the circuit court of Baltimore city dismissing the bill filed by Edwin W. Poe, Stuart S Janney, and Ernest J. Clark, receivers of the United Surety Company, against the Philadelphia Casualty Company.
The bill alleges:
That the United Surety Company was a corporation under the laws of the state of Maryland, engaged in the business of selling surety and casualty bonds in the state of Maryland and elsewhere, as authorized by its charter.
(2) That the Gore-Meenan Company was a corporation under the laws of the state of New York, engaged in a general contracting business in the states of New York, Connecticut, and elsewhere, as authorized by its charter.
(3) That while so engaged, on April 19, 1909, said Gore-Meenan Company entered into a contract with the New Haven Water Company, a corporation of the state of Connecticut, to construct for it a tunnel for a consideration named in said contract.
(4) That on August 2, 1909, said Gore-Meenan Company, for the purpose of protecting itself against loss by reason of any accident occurring on said work to any of its employés, entered into an agreement with the Philadelphia Casualty Company, a corporation of the state of Pennsylvania authorized to issue casualty bonds in the state of Connecticut and elsewhere, whereby said casualty company, for the consideration named in said contract, did insure said Gore-Meenan Company against any such loss occurring between August 6, 1909, and May 6, 1910, by reason of any such accident, not exceeding $5,000 for the death of each person, and delivered to said Gore-Meenan Company its policy of insurance accordingly.
(5) That on or about September 28, 1909, an accident did occur in the progress of said work, resulting in the death of George W. Worden, one of the employés of said Gore-Meenan Company.
(6) That suit was brought in the superior court of New Haven county, by a duly appointed administratrix of George W. Warden, against the said Gore-Meenan Company, by way of nonresident attachment, on the ground of negligence of said Gore-Meenan Company causing the death of said Worden, and assets of said Gore-Meenan Company in the hands of the New Haven Water Company to the extent of $6,000 were attached for the payment of any judgment that might be recovered in said suit against said Gore-Meenan Company, and that the Philadelphia Casualty Company was immediately advised by the Gore-Meenan Company of said accident, and that it defended said suit in the name of the Gore-Meenan Company.
(7) That on October 19, 1909, the United Surety Company, at the request of the said Gore-Meenan Company, issued to the plaintiff in said suit, the administratrix of said Worden, its bond or writing obligatory to relieve said attachment, whereby it bound itself that the said Gore-Meenan Company would, on demand, pay to said plaintiff the amount of any judgment recovered by it in said suit, not exceeding $6,000, with interest.
(8) That the trial of said suit resulted in a verdict for said plaintiff against the Gore-Meenan Company in said superior court of New Haven county for $4,500, with interest from March 2, 1910, and costs of suit, and that on appeal said judgment was affirmed by the Court of Appeals of Connecticut, whereby said judgment became final and conclusive.
(9) That, subsequent to the rendition of said judgment, but before the affirmance by the Court of Appeals, the said Gore-Meenan Company became and still was hopelessly insolvent and unable to pay any of its indebtedness whatever.
(10) That, subsequent to the affirmance of said judgment, the plaintiff therein made demand upon the United Surety Company for the payment of said judgment according to the tenor of said bond of said United Surety Company to relieve said attachment, and thereafter brought suit on said bond in the superior court of New Haven county, and recovered judgment thereon on March 3, 1911, for $4,861.46 and costs.
(11) That on January 13, 1911, in a proceeding then pending in the circuit court of Baltimore city, entitled Thomas H. Bowles et al. v. United Surety Company, these complainants were appointed receivers for said United Surety Company and duly qualified as such, and have since, on May 23, 1911, under the authority and direction of said court, paid said judgment in full, and have caused the same to be entered to their use as receivers aforesaid.
(12) That in virtue of such payment they are entitled to be, and are, subrogated to all the rights of the Gore-Meenan Company against the Philadelphia Casualty Company, and are entitled to recover from it the amount of said judgment so paid by them.
The prayer of the bill is (1) that the court by its decree declare that the United Surety Company, and the complainants as its receivers, are so subrogated to the same extent as if the said Gore-Meenan Company had paid said judgment; (2) that the court by its decree order the Philadelphia Casualty Company shall pay to the complainants the amount of said judgment, interest, and costs so paid by them, and (3) for such further relief as their case may require. All necessary exhibits were filed with the bill.
The defendant demurred to the bill, alleging 13 grounds of demurrer, and the circuit court sustained the demurrer and dismissed the bill, from which order or decree this appeal is taken.
From this summary of the bill of complaint, it appears that the complainants rest their claim to be subrogated "to all the rights of the Gore-Meenan Company against the Philadelphia Casualty Company, under the terms of the policy of liability insurance hereinabove mentioned, to the same extent as though the said Gore-Meenan Company had paid the amount of said judgment," upon the relation which the United Surety Company assumed in executing to the administratrix of Worden its undertaking that the Gore-Meenan Company would, on demand, pay to her the amount of any judgment recovered by her in her action against the Gore-Meenan Company, not exceeding $6,000.
It appears from the record that this undertaking was applied for by the Gore-Meenan Company upon the blank forms of the United Surety Company; that it was accepted by the administratrix of Worden, and was filed in the attachment proceeding; and that the attachment was discharged; and we must assume that it was in pursuance of some Connecticut statute, though the appellee in its brief states that such is not the fact. We do not regard this question, however, as material in any aspect of the case. The Gore-Meenan Company is not a party at all to the instrument. It is the direct and sole obligation of the United Surety Company to the personal representative of Worden, by whom suit thereon was subsequently brought; the insolvency of the Gore-Meenan Company having intervened. It had no relation to the legal liability of that company for the death of Worden. Its sole purpose was to procure the release of the attached funds. The United Surety Company assumed no liability for any debt as such, such as is assumed in an appeal or in a supersedeas, but merely to restore the attached funds in event of the establishment of a debt by a judgment and the failure of the Gore-Meenan Company to pay said judgment on demand. When the receivers of the United Surety Company paid the judgment obtained against it by the administratrix of Worden, they thereby obtained an equitable title to that judgment, and it was properly entered to their use, as alleged in the bill of complaint; but the United Surety Company could acquire no rights by the payment and assignment of that judgment, either legal or equitable, as against the casualty company, which were not previously assured to the Gore-Meenan Company under the terms of the policy of the casualty company. This is distinctly recognized by the complainants in the first paragraph of their prayer for relief, in which they only ask it "under the terms of the policy of liability insurance hereinabove mentioned," and this is in accord with the fundamental principle of subrogation.
Sheldon, in his work on that subject, thus defines the doctrine: "It is the substitution of another person in the place of the creditor, so that the person in whose favor it is exercised succeeds to the rights of the creditor in relation to the debt." The substitute is put in all respects in the place of the party to whose rights he is subrogated.
Bispham in his Principles of Equity, has amplified the language of this terse definition without enlarging its scope or application. He says: "Subrogation is the equity by which a person who is secondarily liable for a debt, and has paid the same, is put in the place of the creditor, so far as to entitle him to make use of...
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