1, 1973, when the taxes were assessed, and that the straw party title holder cases are inapplicable, we must deny defendant's motion for summary judgment. We turn to plaintiff's argument in favor of granting his motion. The argument is quite simple. Plaintiff asserts that he suffered a loss of $22,137.53, because he had to pay that sum to remove a lien for taxes which he was not personally liable to pay. The insuring agreements of defendant's policy insure against, inter alia, any defect on or lien or encumbrance on the title, and plaintiff contends that he is thus insured against this loss. Defendant rejoins with several counterarguments.
First, defendant contends that plaintiff has not established that he suffered a loss, only that he paid the taxes.
Defendant also argues that payment of taxes cannot be a loss because such payment is a normal expense of ownership, and that plaintiff admitted this fact by taking an expense deduction, not a loss, on his federal income tax return for the payments. We think, however, that plaintiff has shown more than the fact that he paid the taxes. He has shown that, as a matter of law, he paid taxes that he was not personally liable for in order to remove a lien on his property. A tax lien is, of course, within the ambit of defendant's insuring agreements. We do not see how such a payment cannot constitute a loss to the plaintiff unless we denude the term "loss" of meaning or construe it tortuously. Plaintiff was, of course, fortunate to have the benefit of the rule announced in Pannonia in light of the delay in delivery of the deed.
Defendant might have deprived him of this advantage when it delivered the policy by excepting the 1973 taxes, since the policy forms the contract between the parties. The title report was issued in December, 1972, before the 1973 taxes had been assessed, hence the title report did not show them. However, defendant admits that it had constructive knowledge of the lien and thus it could have excepted them in a "bring down" of the report and/or on the policy which, as we have noted, is the operative document forming the basis for this action.
Because they did not, when plaintiff had to pay the taxes to protect his property, the benefit thus conferred was lost, and he suffered a loss.
To pose the dilemma in extremis, if a person wins a sum of money in a dice game or a casino, we do not say that he has not suffered a loss if that money is stolen from him as he is exiting or if it is destroyed in an accident or fire.
Defendant next contends that plaintiff "suffered and assumed" the liability for taxes on the property by purchasing it, and thus plaintiff's claim falls within one of the exceptions of the policy. Defendant does not thereby raise any issue of material fact which would prevent us from granting summary judgment. It merely reasserts its claim that plaintiff was personally liable for the taxes and therefore "suffered and assumed" the liability when he purchased the property. Since we have already decided this legal issue against the defendant, it follows that we must reject this argument.
We also do not find a genuine issue of material fact as to the amount of the loss. The parties have stipulated that:
If Commonwealth is liable to Bragman on his Complaint, damages are in the amount of $22,137.53; plus interest (1) on $15,000 from December 28, 1973, to date, and (2) on $7,012.53 from March 21, 1974, to date, plus costs and fees as allowed by the Court.
In view of the foregoing analysis, defendant's motion for summary judgment must be denied and plaintiff's motion for summary judgment must be granted. We recognize that this result means that plaintiff received the benefit of the use of the property for nine months of the year without having to pay any real estate taxes. However, as we have indicated in the body of this opinion, this outcome follows from two rules of Pennsylvania real estate law: (1) the owner of the property on the date taxes are assessed is liable for payment of the taxes for the entire year; and (2) the purchaser at a sheriff's sale is not the owner until he receives the deed. Defendant could have protected itself against this result by making an exception on the policy, but did not. Neither is there anything in the "contract" between the parties for the title policy which, by way of contract construction, changes the result, for the "contract" is now merged in the policy sued upon. While we feel some discomfiture over the outcome (and would have much preferred to be in position to apportion the taxes between plaintiff and defendant as of the date of delivery of the deed), our order denying defendant's motion for summary judgment, granting plaintiff's motion for summary judgment, and entering judgment in favor of plaintiff in the amount of $22,137.53, plus interest, must and does follow.
EDWARD R. BECKER, J.
AND NOW, this 18th day of October, 1976, in consideration of the foregoing opinion, it is ORDERED that:
1. Defendant's motion for summary judgment is DENIED;
2. Plaintiff's motion for summary judgment is GRANTED; and
3. Judgment is hereby entered in favor of plaintiff in the sum of $22,137.53, plus interest:
(1) on $15,000 from 12/28/73 to date; and
(2) on $7,012.53 from 3/21/73 to date.
BY THE COURT:
EDWARD R. BECKER, J.