Court Opinion

ID: 6253323
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:22:20.403748+00
Date Added: 2024-06-11T08:59:28.877579
License: Public Domain

Dissenting Opinion
by Mr. Justice Moschzisker:
It seems to me, to deny the plaintiffs a right of recovery on the ground that, under the circumstances at bar, the Hoffman Company incurred no loss, is not only wrong in *120law, but not required on principle or by the authority cited.
Faulkner v. McHenry, 235 Pa. 298, is not in any sense analogous to the present case. There a grantor of real estate created a bond and mortgage, and the grantee contracted to indemnify him against loss by reason thereof; a judgment was entered against the grantor for part of the mortgage debt; whereupon he instituted suit against the grantee on the contract of indemnity. We held that the grantor had no right of recovery until the judgment was paid, on the ground that, where the covenant for in-' demnity is against loss, there can be no recovery until an actual loss occurs, saying, “When the contract is strictly one of indemnity the indemnitee cannot recover until he has suffered actual loss or damage; the mere incurring of liability gives him no such right.” The case in question was properly decided, and the governing principle correctly stated; but, as before said, it is not analogous to the one at bar.
In Faulkner v. McHenry, if there had been a surety for the grantor, to the holder of the mortgage, and such surety had paid the judgment on his principal’s account, then the cases would have been practically analogous; and, on such a state of facts, it could not have been said the grantor had merely incurred a liability, but had suffered no Joss.
In other words, had the circumstances in the Faulkner case been as just suggested, it, like the present case, would have been an instance where the plaintiff had not merely suffered a liability by the entry of a judgment against him, but where, through his surety, he had actually paid the judgment and thereby incurred a loss which entitled him to sue and recover on the indemnity covenant in his favor. Under such circumstances, the mere fact that the surety, instead of the principal, had paid the judgment, and the latter had thereby incurred a liability to the former, would not properly enter into a subsequent case between the grantor and the grantee on *121the latter’s contract of indemnity, any more than if a friend of the grantor’s had'loaned him the money with which to make the payment, and he had thereby incurred a liability to his friend; for, in such an action, an inquiry into that liability would be entirely irrelevant.
In my opinion, we should view the case at bar as though the surety had handed the $7,500 to the Hoffman Company, and the latter had paid Earle and Sullivan that amount, and thereby incurred a loss. The mere fact that the surety, instead of handing over the money, paid it for the Hoffman Company’s account, does not alter the situation; that is to say, this is not a case where the Hoffman Company has merely incurred a liability to Earle and Sullivan, but where, through its surety to whom it is liable, the Hoffman Company has actually paid its debt to Earle and Sullivan and thereby suffered a loss.
For the reasons stated, I cannot concur in the majority opinion, and, therefore, mark my dissent.
Potter, J., joins in this dissent.