Irons v. Pittsburgh , 64 Pa. Super. 126 ( 1916 )

'Opinion by

Trexler, J.,

The City of Pittsburgh in 1911 changed the grade of certain streets along the property of the estate of Rachel D. Shannon and the viewers appointed to fix the damages in their report filed November, 1913, awarded none to the estate. On appeal, by agreement of the parties, a verdict of $750 in favor of the estate was rendered October, 1915. At the time of the change of grade the Allemannia Fire Insurance Company had two mortgages aggregating $5,500 on the premises of Rachel D. Shannon. Foreclosure proceedings were had and in March, 1914, several years after the actual change of grade was made and prior to the date when the verdict of $750 was rendered, the property was sold at sheriff’s sale and bought in by the insurance company for $706.51.

On January 4,1916, the insurance company presented its petition reciting the facts and asked for a rule on the representatives of Rachel D. Shannon to show cause why the verdict declared October 20, 1915, should not be marked to the use of the insurance company. The court refused the petition. Was this error?

As successor to the title to the premises affected by the change of grade the insurance company has no claim to the damages given. A claim for damages is a personal one and does not pass with the sheriff’s deed. This has been decided in a number of cases, the last being Shields v. Pittsburgh, 252 Pa. 74. The position the company takes is that the change of grade occasioned an injury to the mortgaged premises and was pro tanto a destruction of its security value and that the security being impaired this should be treated as working, ipso facto, an equitable assignment to the mortgagee of the damages assessed in the name of the mortgagor.

We do not see how the insurance company has any standing to enforce its claim. The damages being personal and not passing to the insurance company as purchaser at sheriff’s sale remain the property of the Shannon Estate, the owner at the time the actual change of grade was made. When the property was sold at judicial sale, the land pledged for the debt was reduced to possession by the creditor. Its mortgage,was extinguished. After that the relation, if any, existing between the Shannon Estate and the company was merely that of debtor and creditor. It is true that where the courts have obtained control over the damages assessed, distribution will be made on equitable principles: Powell v. Whitaker, 88 Pa. 445; Workman v. Mifflin, 30 Pa. 362. In these cases the courts seem to have regarded the owner as trustee for his lien creditors and a recovery in his name as one to be controlled for their benefit: Knoll v. N. Y., Etc., Railway Co., 121 Pa. 467. At the time of the presentation of the petition the insurance company was no longer a lien creditor. That relation had terminated with the sheriff’s sale. If the owner of the mortgaged premises is to be regarded as a trustee in equity he should be held to his accountability at a time when the relation of owner and lien creditor exists.

As was said by the learned judge of the court below, “The petition' came too late. It was filed long after the title by foreclosure proceedings had vested in the company. The company—if it ever had an equitable right to intervene for the protection of its mortgage security— was not vigilant in asserting it; but stood by while the executors and trustees at the expense of the estate, and without certainty of recovery, litigated the dispute; losing before the viewers but winning, upon the appeal. Then for the first time, with a certainty fixed by the verdiet, the company proceeded to, demand an assignment thereof.” Even though we were to concede for the sake of argument that the petitioner had standing after it ceased to he a lien creditor and that the petition was presented in time, there is nothing in the petition to invoke the equitable powers of the court. The statement in the petition that the value of the mortgaged premises was reduced by the amount of the damages is not sufficient. The fact that the property mortgaged for $5,500 brought $706.51 at sheriff’s sale would not be conclusive of its value. There should be some definite allegation showing the actual loss suffered by the company. For all we may know the real value of the property may be such to' protect the insurance company for all it has in it. It is the injury to it on which its right to recovery must rest.

The order of court discharging the rule and dismissing the petition is affirmed., Appellant for costs.