J-A24038-15

2015 PA Super 265

* Retired Senior Judge assigned to the Superior Court.

THERESE A. INFANTE,

 Appellant

v.

BANK OF AMERICA, N.A. SUCCESSOR 

BY MERGER TO BAC HOME LOANS 

SERVICING, LP FKA COUNTRYWIDE 

HOME LOANS SERVICING, LP,

 Appellee 

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IN THE SUPERIOR COURT OF

PENNSYLVANIA

 

 No. 154 EDA 2015

Appeal from the Judgment Entered February 5, 2015,

in the Court of Common Pleas of Monroe County, 

Civil Division at No(s): No. 2209 CV 2012

BEFORE: PANELLA, WECHT, and STRASSBURGER,* JJ.

OPINION BY STRASSBURGER, J.: FILED December 18, 2015 

In this action for declaratory judgment, Therese A. Infante (Therese) 

appeals from the judgment entered on February 5, 2015, which, inter alia, 

granted equitable relief to Appellee, Bank of America, N.A (BOA). After 

review, we affirm. 

The trial court made the following findings of fact.

1. Matthew Infante (Matthew), a single man, purchased a lot 

comprised of 1.121 acres at 837 Molasses Valley Road on 

December 23, 2003 for $35,000.00. 

2. Matthew obtained a construction loan in the original principal 

amount of $157,500.00 from Countrywide Home Loans, Inc. 

(Countrywide). He gave a mortgage on January 16, 2004 to 

Countrywide to secure that loan. The mortgage was recorded on 
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January 20, 2004 in the Recorder of Deeds Office (Recorder’s 

Office) in Record Book volume 2179, page 7715.

3. Matthew and Therese Infante (Therese) were married on 

February 13, 2004. 

4. Matthew transferred title to the property to himself and Therese 

as tenants by the entireties on February 24, 2004. The deed is 

recorded in Record Book volume 2182, page 7201 in the 

Recorder’s Office.

5. The lnfantes constructed two houses on the property and took 

possession on July 16, 2004. 

6. One of the two houses is a colonial-style home and the other is a 

Cape Cod style home. They are connected by a shared laundry 

room. The lnfantes occupied the colonial-style home, and their 

daughter’s family currently resides in the other.

7. Matthew handled the lnfantes’ financial affairs. 

8. On January 7, 2008, Matthew obtained a loan from Countrywide 

in the amount of $200,200.00. The loan was secured by a 

mortgage (the [2008] Mortgage) that was recorded in the 

Recorder’s Office in Record Book volume 2325 page 4786. The 

loan proceeds were used in part to satisfy the existing mortgage 

with Countrywide, which had a balance at that time of 

$152,503.93. The loan was also used to pay off [Matthew’s] 

credit card debts with Chase ($9,309), WFF National Bank 

($2,433), Chase ($8,941), and Sovereign Bank ($16,882). It 

also satisfied a loan secured by his Kia Sorrento automobile. 

9. Therese had no credit cards in her name in January, 2008.

10. Although Countrywide intended to obtain a first mortgage on 

the Infante property to secure the new loan, Countrywide only 

required Matthew to sign the note and the [2008 M]ortgage. 

11. Service Link, a title agency, handled the title work and 

conducted the settlement of the loan. 

12. Matthew signed a Countrywide loan application in which he 

acknowledged and agreed that the “loan requested pursuant to 
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this application ... will be secured by a mortgage or deed of trust 

on the property described in this application.”

13. Countrywide issued settlement instructions to Service Link, 

requiring that “all persons on title” sign the mortgage and that 

the [2008 M]ortgage constitute a valid, “first position” mortgage 

against the property.

14. Matthew completed and signed a “Borrower Agreement and 

Certification” at Countrywide’s behest at the time of closing. That 

document disclosed to Countrywide the following information:

1. List all Property Owners who are applicants for 

this loan: Matthew V. Infante (handwritten)

2. List all other owners: Therese A. Infante 

(handwritten)

3. I/We hold the property as: Husband and [W]ife 

(handwritten checkmark)

... Note: If holding title as a married person(s), 

civil union partner(s) or domestic partner(s) please 

indicate whether you have divorced, separated or 

have been widowed since the date you acquired the

Property as indicated above. __ Yes x_ No (No was 

handchecked)

15. The [2008 M]ortgage names Matthew V. Infante as “Borrower.” 

Next to his name on the Mortgage, “A SINGLE INDIVIDUAL” is 

crossed out, and “a married man” is handwritten in its place. 

16. The mortgagee of the [2008] Mortgage loan was Mortgage 

Electronic Registration Systems, Inc. (MERS) as nominee for 

Countrywide. 

17. MERS assigned the [2008 M]ortgage to ... (BOA) on September 

13, 2011. The assignment is recorded in the Recorder’s Office at 

Record Book volume 2391, page 5316. 

18. Therese began assisting her husband in paying bills in 2009 

after he became ill. From that year until May 8, 2011, Therese 

paid the monthly mortgage payment to [(BOA)]. 
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19. Therese was not aware that Matthew had refinanced the 

Mortgage in 2008. 

20. Matthew died on May 8, 2011. 

21. Therese was made aware of the [2008 Mortgage] in [Matthew’s] 

name alone by her attorney after her husband’s death. 

22. Therese stopped paying the [2008] Mortgage after May 9, 2011.

Trial Court Opinion, 9/24/2014, at 1-4 (citations omitted).

On March 15, 2012, Therese filed a complaint for declaratory judgment 

asserting that the 2008 Mortgage was not a valid lien against the property. 

BOA filed an answer with new matter and counterclaims. In its 

counterclaims, BOA sought relief based on reformation of mortgage, 

declaratory relief, equitable subrogation, unjust enrichment, and equitable 

lien. Therese filed a responsive pleading. 

The case proceeded to a non-jury trial on September 3, 2014. On 

September 24, 2014, the trial court issued its verdict, which found in favor 

of Therese as to the reformation of mortgage, and in favor of BOA’s request 

as to the issue of equitable subrogation, and placed an equitable lien against 

the property in the amount of the 2004 Mortgage, $152,503.93, plus 

interest from June 1, 2011. 

Following oral argument, Therese’s timely-filed post-trial motions were 

denied on December 9, 2014. Judgment was entered on February 5, 2015. 

This timely appeal followed. Both Therese and the trial court complied with 

Pa.R.A.P. 1925.
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On appeal, Therese argues that the trial court erred in granting BOA’s 

request for equitable subrogation. Specifically, she contends that, in 

reaching its result, the trial court (1) ignored more recent precedential cases 

issued by this Court and (2) improperly distinguished prior Supreme Court 

holdings. Therese’s Brief at 6. 

Our standard and scope of review for these questions are wellestablished.

Our review in a non-jury case such as this is limited to a 

determination of whether the findings of the trial court are 

supported by competent evidence and whether the trial court 

committed error in the application of law. Findings of the trial 

judge in a non-jury case must be given the same weight and 

effect on appeal as a verdict of a jury and will not be disturbed 

on appeal absent error of law or abuse of discretion. When this 

Court reviews the findings of the trial judge, the evidence is 

viewed in the light most favorable to the victorious party below 

and all evidence and proper inferences favorable to that party 

must be taken as true and all unfavorable inferences rejected.

The [trial] court’s findings are especially binding on appeal, 

where they are based upon the credibility of the witnesses, 

unless it appears that the court abused its discretion or that the 

court’s findings lack evidentiary support or that the court 

capriciously disbelieved the evidence. Conclusions of law, 

however, are not binding on an appellate court, whose duty it is 

to determine whether there was a proper application of law to 

fact by the lower court. With regard to such matters, our scope 

of review is plenary as it is with any review of questions of law.

Shaffer v. O’Toole, 964 A.2d 420, 422-23 (Pa. Super. 2009) (internal 

quotation marks and citations omitted).
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In both of her issues, Therese contends that the trial court erred in 

finding that BOA was entitled to equitable subrogation. Therese’s Brief at 9-

18. This Court has explained as follows.

While the priority of a lien is generally determined by the 

date it was recorded, the doctrine of equitable subrogation is an 

exception to this “first in time” rule. ...[E]quitable subrogation is 

an equitable remedy designed to avoid a person’s receiving an 

unearned windfall at the expense of another. Put more simply, 

equitable subrogation allows a person who pays off an 

encumbrance to assume the same priority position as the holder 

of the previous encumbrance.

[Pennsylvania has] recognized the doctrine of equitable 

subrogation. Like many other jurisdictions, we require four 

criteria to be met for equitable subrogation to apply. These four 

requirements are:

(1) the claimant paid the creditor to protect his own 

interests;

(2) the claimant did not act as a volunteer;

(3) the claimant was not primarily liable for the debt; 

and

(4) allowing subrogation will not cause injustice to 

the rights of others.

1313466 Ontario, Inc. v. Carr, 954 A.2d 1, 4 (Pa. Super. 2008) (citations 

and quotations omitted). 

With respect to the second prong of the test, this Court has noted that 

“[o]ne who is under no legal obligation or liability to pay a debt and who has 

no interest in, or relation to, the property is a stranger or volunteer with 

reference to the subject of subrogation.” First Commonwealth Bank v.

Heller, 863 A.2d 1153, 1159 (Pa. Super. 2004) (citation omitted). 
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Citing this Court’s decisions in Carr, Heller, and Home Owners’ 

Loan Corp. v. Crouse, 30 A.2d 330, 332 (Pa. Super. 1943), Therese 

contends that BOA failed to satisfy the aforementioned requirements and, as 

such, the trial court erred in granting equitable subrogation. 

In Crouse, 

this Court reviewed the claim of a creditor to whom the 

homeowners had applied for a loan to pay various earlier liens 

on the property. The creditor extended the loan, the proceeds of 

which were duly applied to those liens. The creditor was 

unaware, however, of an intervening judgment which had been 

entered against the homeowners, even though the judgment 

appeared in public records. The creditor requested that the 

intervening lien holder subordinate its lien to that of the creditor. 

The intervening lien holder refused. The creditor filed a 

complaint alleging the intervening lien holder was unjustly 

enriched at its own expense and requested that the creditor be 

subrogated to the priorities of those lien holders whose liens the 

creditor had paid.

Heller, 863 A.2d at 1158-1159.

This Court denied a claim for equitable subrogation on the basis that 

“Home Owners’ Loan Corporation was a stranger to the homeowner and that 

it was under no legal obligation or compulsion to pay the homeowner’s 

debts. The corporation was an entirely voluntary agent with no interest in 

the property and at liberty to make its own bargain-agree [sic] or refuse to 

make its loan as it saw fit.” Crouse, 30 A.2d at 332. Moreover, the Court 

determined that Home Owners’ negligence prevented it from discovering the 

intervening judgment. Id.
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In Heller, there existed three mortgage liens against the property at 

the time First Commonwealth Bank extended a mortgage loan to Heller, and 

at the time of closing. First Commonwealth Bank paid off the first two liens, 

but, because its title company failed to discover the third mortgage held by 

Central bank, it did not pay off the third. The trial court denied First 

Commonwealth Bank’s request for equitable relief on the basis that the Bank 

“had not demonstrated the existence of the prerequisites necessary for 

invoking the remedy of equitable subrogation.” Heller, 863 A.2d at 1155-

56. On appeal, this Court recognized Crouse as binding precedent and 

affirmed the trial court’s determination that First Commonwealth’s “‘problem’ 

... was the result of its own negligence in failing to discover [Central] Bank’s 

mortgage, to which [First Commonwealth’s] mortgage could only be 

secondary.” Id. at 1155.

Most recently, in Carr, we held that U.S. Bank was not entitled to 

equitable subrogation. In that case, as in Crouse and Heller, the title 

search had failed to reveal another mortgage lien on the property. Applying 

Crouse, we held that U.S. Bank’s negligence in failing to discover the 

mortgage held by 1313466 Ontario, Inc. barred relief. 

Therese argues that Crouse, Heller, and Carr require this Court to 

grant her relief. In contrast, BOA argues that two Supreme Court cases, 

Haverford Loan & Bldg. Ass’n of Philadelphia v. Dougherty, 37 A. 179 
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(Pa. 1897) and Gladowski v. Fefczak, 31 A.2d 718 (Pa. 1943), control. 

The trial court summarized those holdings as follows.

In Haverford, the borrower, Thomas Dougherty, believed 

that he held title to a property under his late wife’s will. He 

obtained a mortgage for $2,200.00 from Haverford []. The loan 

was to be secured by a first lien position against the property. At 

settlement, the loan proceeds were used in part to satisfy the 

existing first mortgage held by the Fire Association. After closing, 

Haverford learned that Dougherty was only a one-fifth tenant in 

common. The will had devised the property to Dougherty and his 

four children. Haverford sought equitable subrogation to the first 

mortgage rights of the Fire Association, whose lien it had 

satisfied. The [C]ourt allowed the subrogation, holding that:

Where money has been loaned upon a defective 

mortgage for the purpose of discharging a prior valid 

incumbrance, {sic} and has actually been so applied, 

the mortgagee may be subrogated to the rights of 

the prior incumbrancer whom he has thus satisfied, 

there being no intervening incumbrances. Sheld. 

Subr. § 8.

[Haverford, 37 A. at 181].

A later decision of the Pennsylvania Supreme Court 

allowed equitable subrogation under similar circumstances. In 

Gladowski, Polish Falcons, Nest No. 290 of Natrona, an 

unincorporated, subordinate lodge of the Polish Falcons of 

America, was the owner of a valuable clubhouse in Natrona that 

had suffered flood damage. The property was subject to a 

$3,000.00 mortgage. Nest No. 290 conveyed the property to the 

American Citizen Club, which then obtained a $6,000.00 

mortgage. The proceeds from this mortgage paid off the $3,000 

mortgage and were otherwise used to make repairs to the 

property. After the mortgage funds were disbursed, the deed 

from the Polish Falcons to the American Citizen Club was 

declared invalid because the local chapter did not have the 

necessary approval of the national organization to sell the 

property.

The new mortgagee did not have a valid first mortgage, 

because the deed to the American Citizen Club had been 
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declared by a court to be invalid. The mortgagee brought an 

action seeking to impose its mortgage as an equitable lien. Our 

supreme court allowed the lien, citing the Restatement of 

Restitution:

Where a person lends money to another who 

contracts to use the money for the discharge of a 

lien upon property which the other represents as 

belonging to him and where the money so lent is 

used for the discharge of such lien, the lender is 

entitled to have the lien reinstated for his benefit if, 

unknown to him, the property was not owned by the 

other.

[Gladowski, 31 A.2d at 720] citing Restatement of the Law of 

Restitution, § 43(c).

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[In finding that Haverford was entitled to equitable 

subrogation, t]he [Supreme Court] stated []:

In the present case the appellant was not a 

volunteer, but paid the first mortgage on the express 

direction of the debtor, and with the intention of both 

parties that the appellant should be secured by the 

land. A person who has lent money to a debtor for 

the purpose of discharging a debt may be 

subrogated by the debtor to the creditor’s rights; 

and if the party who has agreed to advance the 

money for the purpose employs it himself in paying 

the debt and discharging the incumbrance on land 

given for its security, he is not to be regarded as a 

volunteer. He is not, after such an agreement with 

the debtor, a stranger in relation to the debt, but 

may, in equity, be entitled to the benefit of the 

security which he has satisfied with the expectation 

of receiving a new mortgage or lien upon the land for 

the money paid. When the holder of a junior 

mortgage discharges the lien of a senior 

incumbrance upon the property, he thereby becomes 

entitled to all the benefits of the security represented 

by the lien so discharged. When on the foreclosure of 

a second mortgage it appears that the loan by the 
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second mortgagee was made on an agreement with 

the mortgagor that it should be applied to extinguish 

the first mortgage, and that part of the loan was 

actually so applied, the second mortgagee is entitled 

to a decree subrogating him to the rights of the first 

mortgagee on payment of the balance due on the 

mortgage. Where money has been loaned upon a 

defective mortgage for the purpose of discharging a 

prior valid incumbrance, and has actually been so 

applied, the mortgagee may be subrogated to the 

rights of the prior incumbrancer whom he has thus 

satisfied, there being no intervening incumbrances.

[Haverford, 37 A. at 181 (citations omitted)].

Almost-fifty years later, in the Gladowski case the 

Supreme Court again allowed equitable subrogation where a 

mortgage was obtained on a defective title. Here the court cited 

the Restatement of Restitution in support of its ruling:

And in § 162 it is stated: ‘Where property of 

one person is used in discharging an obligation owed 

by another or a lien upon the property of another, 

under such circumstances that the other would be 

unjustly enriched by the retention of the benefit thus 

conferred, the former is entitled to be subrogated to 

the position of the obligee or lienholder.’ That the 

law in most jurisdictions is in accord with these 

statements is shown by the long list of authorities in 

support of them cited in Ingram v. Jones, 10 Cir., 

47 F.2d 135, 140. That they have been accepted and 

followed by the appellate courts of our own State is 

established by cases in which they have been 

applied: [Haverford, supra.]; Smith v. Smith, Jr., 

101 Pa. Super. 545 [(1930)]; see also General 

Casmir Pulaski Building & Loan Association v. 

Provident Trust Co., [12 A.2d 336 (Pa. 1940)].

[Gladowski, 31 A.2d at 720].

Trial Court Opinion, 9/24/2014, at 6-8, 10-11 (footnote omitted).
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We agree with the trial court and BOA that the instant case is in line 

with the factual scenarios addressed by our Supreme Court in Haverford 

and Gladowski, and that the three Superior Court cases relied upon by 

Therese are readily distinguishable. As the trial court points out, this Court’s 

decisions in Crouse, Heller, and Carr deny relief to mortgagees that pay off 

an existing mortgage, but mistakenly did not obtain a first lien position due 

to the presence of an undiscovered intervening creditor. Such is not the 

case herein. Rather, BOA is seeking reimbursement for the amount of the 

2004 mortgage its successor paid off in 2008, and to which Therese was 

subject at the time she took title in 2004. We agree with the trial court that, 

under Haverford and Gladowski, BOA has a valid claim for equitable 

subrogation because Countrywide did not act as a “volunteer,” and because 

Therese would be unjustly enriched if she were permitted to retain the 

property without bearing responsibility for the amount of the 2004 

mortgage. Moreover, based on the above, we hold that BOA is entitled to an 

equitable lien against the property. See General Casmir Pulaski Bldg. & 

Loan Ass'n v. Provident Trust Co. of Philadelphia, 12 A.2d 336, 338 

(Pa. 1940) (“Under the law of unjust enrichment, the [purchaser] should be 

required to reimburse [the lender] for the money lent to buy the property as 

far as equitably proper to do so.”) 

Judgment affirmed. Jurisdiction relinquished. 
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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 12/18/2015