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ZURICH GENERAL ACCIDENT AND LIABILITY INSURANCE COMPANY v. KLEIN ET UX. (04/11/56)

April 11, 1956

ZURICH GENERAL ACCIDENT AND LIABILITY INSURANCE COMPANY, LTD.
v.
KLEIN ET UX., APPELLANTS.



Appeal, No. 18, Feb. T., 1956, from judgment of Court of Common Pleas of Lackawanna County, March T., 1954, No. 6, in case of Zurich General Accident and Liability Insurance Company, Ltd. v. Louis Klein et ux. Judgment affirmed.

COUNSEL

Irving L. Epstein, for appellants.

William J. Garvey, with him James W. Scanlon, for appellee.

Before Rhodes, P.j., Hirt, Gunther, Wright, Woodside, Ervin, and Carr, JJ.

Author: Ervin

[ 181 Pa. Super. Page 50]

OPINION BY ERVIN, J.

This action in equity involves the application of the doctrines of "unjust enrichment" and "restitution."

The lower court found, upon ample evidence, that the defendants, appellants, sold certain real estate to a purchaser under general warranty deed, warranting that the property was free and clear of any encumbrances. The attorney who searched the title for the purchaser failed to discover the liens of certain unpaid taxes against the property for years prior to the date of purchase. Subsequently the purchaser, who was threatened with a tax sale, paid the delinquent taxes and claimed reimbursement from the attorney. Plaintiff, appellee, the insurer on the attorney's liability policy covering the title search, upon being notified of the claim by the attorney, paid the purchaser the amount of the delinquent taxes. Appellee, after demand for reimbursement, filed a complaint in equity

[ 181 Pa. Super. Page 51]

    claiming this amount from appellants, the original vendors, on the theory that appellants improperly retained money from the purchase price which should have been used to pay the delinquent taxes and so were unjustly enriched at the expense of appellee. In new matter the appellants pleaded a release from the purchaser. This release was excluded from evidence by the lower court for reasons hereinafter considered.

Appellants have appealed from the lower court's final decree entering a money judgment for appellee to reimburse it for the money paid to reimburse the purchaser.

The principal argument of appellants is that this is not a suitable case for the application of the above mentioned doctrines. With this contention we do not agree.

Section 1 of Restatement, Restitution, provides: "A person who has been unjustly enriched at the expense of another is required to make restitution to the other." Comment a under this section provides: "A person is enriched if he has received a benefit. A person is unjustly enriched if the retention of the benefit would be unjust. A person obtains restitution when he is restored to the position he formerly occupied either by the return of something which he formerly had or by the receipt of its equivalent in money. Ordinarily, the measure of restitution is the amount of enrichment received, but as stated in Comment e, if the loss suffered differs from the amount of benefit received, the measure of restitution may be more or less than the loss suffered or more or less than the enrichment." Comment b under the same section provides: "A person ...


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