# Fidelity Bank v. Tiernan

> Superior Court of Pennsylvania · June 29, 1977 · 249 Pa. Super. 216

URL: https://www.frixlaw.com/law-library/cases/9729760

## Case

- **Full name:** The FIDELITY BANK, Trustee of the Estate of George H. Tiernan v. Walter F. TIERNAN and Margaret R. Lynagh, Appellants
- **Court:** Superior Court of Pennsylvania
- **Decided:** June 29, 1977
- **Citations:** 249 Pa. Super. 216; 375 A.2d 1320; 1977 Pa. Super. LEXIS 1995
- **Precedential status:** Published
- **Opinion:** Dissent by Voort
- **Judges:** Spaeth, Voort, Watkins, Jacobs, Hoffman, Cercone, Price, Van Voort Spaeth, Cer-Cone, Van Yoort
- **Cited by:** 3 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9729760

## Opinion text

*236 VAN der VOORT,
Judge, dissenting:
The instant appeal arises out of an action in assumpsit instituted in 1972 to recover monies paid by plaintiff-appelleé to defendants-appellants. The appellee Bank was the testamentary trustee under the Will of George H. Tiernan, who died on May 7, 1933. The appellee brought this indemnification action against appellants to recover overpayments made to appellants as a result of a misconstruction of the Will. A jury trial was held on April 2nd and 3rd, 1974, and a verdict returned in favor of appellee in the sum of almost thirty eight thousand ($38,000.00) dollars.
The record shows that the Will in issue provided that the residuary trust would be divided into two equal shares; one for the Testator’s son, Walter G. Tiernan, for his life; the other to pay the income to the Testator’s other son, Arnold J. Tiernan, for life. Upon the death of a son, his widow not surviving, the principal was to be distributed to and among “all my grandchildren”. When Walter died a widower on March 31, 1963, he was survived by two children, the above named defendants. The other son, Arnold, was still living and he had three children. Upon an informal accounting without any audit before the Orphans’ Court, the trustee distributed Walter’s entire share to his own children, the defendants, ignoring the rights of Arnold’s three children. At the time of distribution, the Bank discussed distribution without audit with defendants, and suggested that they sign a paper entitled “Receipt, Release and Waiver of Audit”. The agreement provides: “We, the undersigned, being the sole parties in interest in this trust, for the purpose of inducing the trustee to make distribution without a Court audit, 1. Acknowledge that we have examined the Trustee’s Account and approve the same ... 2. Acknowledge receipt of principal in the amount of $62,225.12 . and income, consisting of cash in the amount of $1,118.84 .” and “3. Agree to indemnify the trustee against all liability, loss or expense which may be incurred as the result of the settlement of this account, or of the distribution being made upon this Receipt and Release to the extent *237 of our share.” The document was signed and sealed by the two defendants-appellants on July 19, 1963.
On November 19, 1968, Testator’s other son, Arnold, died survived by a widow. At a formal accounting of Arnold’s share of the trust, the overpayment to the appellants was discovered. Appellee Bank advised appellants of the error which it had made and asked that it be reimbursed for the excess share of their father’s principal which had been distributed to them. Appellants pleaded their inability to repay the excess because they had spent the same.
Thereafter, the Bank prepared and filed a formal account of Walter’s share, and on October 19, 1972, the Bank was ordered by adjudication of the Orphans’ Court Division to pay the principal of Walter’s share, amounting to $62,225.12, plus income, to all five grandchildren of Testator. Fidelity was also surcharged the full shares to be paid to the three first cousins of the appellants, together with four percent interest computed from June 19,1963 to date of distribution.
The appellants have not contested the existence of the erroneous payment. Rather, they offer several defenses and or claims of trial error in an effort to avoid repayment. I would find no merit in any of the arguments raised by appellants.
Initially, appellants contend that appellee’s claim was barred by a six year statute of limitations, noting that the alleged wrongful payment was made in 1963, while suit was not instituted until 1972. The appellant apparently relies upon the Act of March 27,1713,1 Sm.L. 76, § 1,12 P.S. § 31. It is evident that appellants in raising this argument, have ignored the fact that the indemnity agreement was under seal, creating a twenty year “period” of limitations. 1 See *238 Transbel Investment Company, Inc. v. Scott, 344 Pa. 544 , 26 A.2d 205 (1942).
The appellants next argue that the Bank’s action is “insufficient as a matter of law” since the claim for indemnification on the contract is based upon the Bank’s own negligence. I have heretofore recited the exact words of the indemnification agreement, which with clarity, evince the appellants’ unconditional intent to indemnify the Bank against any liability, loss, or expense arising due to the distribution. There is no language excluding situations caused by appellee’s negligence from the appellants’ assumption of indemnification liability. Contrary to the position taken by Judge SPAETH, in his Opinion, I cannot accept appellants’ claims that the indemnification language is unclear, susceptible to differing interpretations, or otherwise ambiguous in conveying the intent of the parties to the instrument.
Next, it is contended by appellants’ that the appellee’s distribution resulted from a mistake of law rather than a mistake of fact. It has been established, in cases based upon common law assumpsit principles, and absent express indemnification agreements, that a party may recover an erroneous payment if such payment was made upon a mistaken apprehension of facts, but may not recover when payment was based upon a mistake of law. See Kunkel v. Kunkel, 267 Pa. 163 , 110 A. 73 (1920). In the instant case, the lower court submitted the issue to the jury of whether the appellee had made a mistake of fact or a mistake of law in making excess payment in 1963. The jury determined that a mistake of fact had occurred. In my view, the submission of that issue to the jury, its finding, and the arguments to the contrary by appellant are all inconsequential to the material issues in this case. As noted above, the appellee instituted this action as an indemnification action, based upon an express written contract under seal, rather than upon common law assumpsit principles which might require restitu *239 tion in certain circumstances of wrongful payment. 2 Compare Ferguson v. Yard, 164 Pa. 586 , 30 A. 517 (1894) and Montgomery’s Appeal, 92 Pa. 202 (1879), which both refer to the absence of a “refunding bond”. The question of whether the mistake was one of law or fact is not therefore germane to the ultimate resolution of the case. Moreover, an action based upon common law restitution principles would have been outside the statute of limitations in this case where overpayment was made in 1963 and suit filed in 1972. See the Act of March 27, 1713,1 Sm.L. 76, § 1,12 P.S. § 31.
The appellant raises a multitude of challenges to the lower court’s rulings concerning the admission of certain evidence and to its charge to the jury. I have reviewed all such claims and find them to be without merit. 3
I must respectfully dissent.
JACOBS and PRICE, JJ., join in this dissenting opinion.
. In Footnote 1 of the Opinion authored by my colleague Judge HOFFMAN, it is maintained that there was no allegation in the complaint that the contract was under seal. I must respectfully disagree. Paragraph two of the complaint referred to the indemnity agreement and noted that: “A true and correct copy is attached hereto, made a part hereof and marked Exhibit ‘B’ ”, Thus, the sealed document was clearly a part of the complaint of the plaintiffappellee.
. Appellants’ counsel during a conference in chambers that was transcribed stated that this was the nature of the appellee’s cause. Neither the appellee’s attorneys nor the lower court indicated disagreement with this statement.
. Contrary to the views expressed in the Opinion authored by Judge HOFFMAN in this case, I find there to be no basis for concluding that reversible error occurred with the introduction of the prior adjudication of the Orphans’ Court at the trial of the instant case. This document was not an opinion, as that opinion notes, but rather an adjudication denominated as such by the Orphans’ Court setting forth the facts upon which that Court relied in surcharging the Appellee Bank. In the instant action, the claim of the bank was based upon the indemnity agreement to which it and the Appellants were parties. The primary and best evidence necessary to support the Appellee Bank’s claim was the final adjudication of the Orphans’ Court which determined that the earlier payment to Appellants had been excessive and erroneous. I cannot imagine better evidence to support the claim, and a relitigation of the issues resolved in the prior adjudication would surely have violated rules of res judicata. Unlike Judge HOFFMAN, I find no commentary in the adjudication which could be deemed to have had any possible prejudicial effect on the jury.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9729760. Public record. Not legal advice.