Union Trust Co. v. Severhoff

RICHARDS, J.

The Union Trust Co. brought an action in the Lucas Common Pleas to recover from Peter Severhoff an amount of money which it claimed was due it by the way of subrogation. A demurrer to the Trust Co’s, petition was sustained and final judgment was rendered dismissing the petition.

The petition averred that Severhoff had gone to the Commerce Guardian Trust and Savings Bank of Toledo on March 3, 1924, and offered to sell it a certain check for 100,000 Jugo-slavia kronen. It is claimed that an employe in the Toledo bank called the foreign exchange department of the Union Trust Co. of Cleveland, and asked for a quotation on the 100,000 kronen. It was alleged that a year prior to that date the Jugo-Slavia kronen was the unit of value, but had been supplanted by the Jugo-slavia dinar, on a ratio of 4 kronen to 1 dinar, and since then quotations had been made on dinars as the unit of value and not the kronen.

The employe of the Union Trust Có., believing a quotation on dinars had been asked for, quoted a price of $1.26 per 100. The market price on kronen that day was 31 1-2 cents per 100. At all events the Toledo bank paid Severhoff $1260. The Union Trust Co. contended that Severhoff was present at the time the conversation over the phone took place, and he knew the market value of the kronen to be in the neighborhood of 31 1-2 cents per 100; knew a mistake had been made; knew he was receiving $922.50 more than he should have received, but, nevertheless, took the money and has refused to refund same.

On dismissal of the petition, error was prosecuted and the Trust Co contends that sustaining of the demurrer was error; and that since it paid the Toledo bank on the check it was subrogated to its rights; and has a right of action against Severhoff.

The Court of Appeals held:

1. The mistake was one of fact, and it has always been the rule of common law that money paid under mistake of a material fact may be recovered back.

2. Wherever a party is compelled to pay a debt to protect his own rights, a court of equity will substitute him in the place of the creditor as a matter of course, without any agreement to that effect.

3. In view of the doctrine of subrogation the petition states a good cause of ■ action and is not open to a demurrer.

Judgment reversed and cause remanded.