Wagner v. Fehr
| Decision Date | 10 April 1905 |
| Docket Number | 48 |
| Citation | 60 A. 1043,211 Pa. 435 |
| Parties | Wagner, Appellant, v. Fehr |
| Court | Pennsylvania Supreme Court |
Argued March 1, 1905
Appeal, No. 48, Jan. T., 1905, by plaintiff, from decree of C.P. Berks Co., equity docket 1903, No. 846, dismissing bill in equity in case of John S. Wagner v. Horace Fehr and Francis F. Seidel. Reversed.
Bill in equity for a reconveyance of real estate. Before ENDLICH, J.
The material averments of the bill and the grounds of demurrer are set forth in the opinion of the Supreme Court.
Error assigned was decree dismissing the bill.
The assignment of error is sustained and the decree is reversed with a procedendo.
Isaac Hiester, with him D. Nicholas Schaeffer, for appellant. -- The remedy at law is not adequate for it falls short of giving the plaintiff what he is entitled to have Independent B. & L. Assn. v. Real Estate Title Co., 156 Pa. 181.
The remedy at law is not complete for it does not attain the full justice of the case: Griswold v. Gebbie, 126 Pa 353; 1 Story's Equity Jurisprudence, sec. 193; Cocking v. Pratt, 1 Ves. 400; Mays v. Dwight, 82 Pa. 462.
The uniform practice of the courts of Pennsylvania has been to sustain a bill in equity for rescinding and canceling a deed of real estate procured by fraud and for ordering a reconveyance where the deed has been recorded. To affirm this decree would establish a new practice in this respect: Meurer's Appeal, 119 Pa. 115; Mortland v. Mortland, 151 Pa. 593; Williams v. Kerr, 152 Pa. 560; Lower's App., 1 Walker, 404; Kingsland v. Cavanagh, 31 Pitts. L.J. (N.S.) 378.
H. P. Keiser, for appellee. -- We submit that the plaintiff and appellant should be remitted to his remedy at law, and cite in support of our contention: Young's Appeal, 3 Penny. 463; Mackintosh v. Tracy, 4 Brews. 59; Way's Appeal, 8 A. Repr. 173; Edelman v. Latshaw, 159 Pa. 644.
Before MITCHELL, C.J., FELL, BROWN, MESTREZAT and ELKIN, JJ.
The purpose of the bill filed in this case is to annul and set aside a contract for the conveyance of real estate and to compel a reconveyance of the property. The bill avers that the defendants and certain other parties procured a charter for a corporation under the name of the American Match Company; that by the certificate it was made to appear that the capital stock of the corporation was $200,000, divided into 2,000 shares, and that defendant Fehr had subscribed for 180 shares and defendant Seidel for 532 shares, and that $20,000, ten per cent of the capital stock, had been paid in cash to the treasurer; that early in September, 1902, Fehr called upon the plaintiff and offered to purchase from him a certain house and lot for $3,350, of which $1,216.67 was to be paid in cash and $2,133.33 in thirty-two full paid shares of stock of said company; that Fehr induced the plaintiff to sell and convey to him the house and lot on the proposed terms by representations which were false, and known to him to be false, that another party was willing to take said stock at the same price in exchange for a property belonging to him but less convenient for Fehr's purpose, and that the company was legitimately organized and was doing a prosperous business, was earning six per cent on its capital stock, etc.; that Fehr took possession of the property, but instead of occupying it by himself and family as he had represented it to be his intention of doing, sold and conveyed it on September 27, 1902, to Seidel for whom Fehr in fact made the purchase and who was fully aware of the facts and misrepresentations referred to; that "plaintiff has but lately learned and now avers that at the time said certificate for incorporation was made no money had been paid to the treasurer of the corporation on account of the capital stock, that none of the subscribers named in the certificate ever paid cash for any part of the stock subscribed by them, that ten per cent of the capital stock was never paid in cash at any time," and that the stock was practically worthless at the time he sold and conveyed the house and lot to Fehr; that upon learning the facts, plaintiff notified Fehr of his election to rescind the contract because of the fraudulent representations and tendered a return of the thirty-two shares of stock and the sum of $1,216.67, paid in cash, and demanded a reconveyance, but the defendants refused to reconvey or to make any satisfaction whatever. The bill prays for a decree annulling and setting aside the contract between the plaintiff and Fehr and requiring the defendants to reconvey to plaintiff the house and lot clear of all encumbrances upon the return to them of the money and stock given for it, or, if the defendants are unable to reconvey the property, to pay plaintiff $2,133.33 with interest upon the return to them of the stock.
The defendant Seidel demurred to the bill on the grounds (1) that the plaintiff is not entitled to the relief claimed, and (2) that he has a full, complete and adequate remedy at law. The court below sustained the demurrer and the plaintiff has appealed.
The constitution of 1874 provides that the courts of common pleas shall have and exercise "such chancery powers as are now vested by law in the several courts of common pleas of this commonwealth, or as may hereafter be conferred upon them by law." By the 39th section of the Act of June 13, 1840 P.L. 666, 1 Purd. 777, it was enacted that "the equity jurisdiction . . . of the court of common pleas for said county (of Philadelphia) shall be extended to all cases arising in said city and county, over which courts of chancery entertain jurisdiction on the grounds of fraud, accident, mistake or account." By the subsequent Act of February 14, 1857, P.L. 39, 1 Purd. 777, the equity jurisdiction exercised by the common pleas of Philadelphia was extended to the courts of common pleas throughout the commonwealth. It will be observed, therefore, that in cases of fraud the legislature has conferred on the courts of common pleas of the state the powers and jurisdiction of courts of chancery. Of course, the constitutional provision above alluded to and the statutes conferring equity jurisdiction do not contravene or conflict with the 7th section of the bill of rights which declares that "trial by jury shall be as heretofore, and the right thereof remain inviolate:" North Penna. Coal Co. v. Snowden, 42 Pa. 488; Haines's Appeal, 73 Pa. 169. As early as 1849, however, in Wesley Church v. Moore, 10 Pa. 273, Chief Justice GIBSON, speaking for this court, said: "The equitable jurisdiction conferred by these statutes is a valuable -- indeed, an indispensable one; and it ought to be extended by every interpretation of which the words are susceptible." In many subsequent cases, including Mortland v. Mortland, 151 Pa. 593, decided in 1892, this court has manifested a disposition towards a liberal exercise of the equity powers conferred by the statutes. In cases of fraud, where the remedy at law is inefficient and inadequate to do complete justice between the parties, the court will not refuse to exercise its chancery jurisdiction. In speaking of the general jurisdiction of chancery in cases of fraud, Mr. Bispham (Principles of Equity, sec. 200) says: This excerpt is quoted in Mortland v. Mortland, supra, and it is there held that, In Williams v. Kerr, 152 Pa. 560, a bill for reconveyance of land was sustained on the ground that the owners were induced to sell it by the false representations of the vendee that an improvement would be immediately placed upon the property which would enhance the value of the other lands of the vendor. In that case it was claimed by the defendants that they had paid the plaintiff all the land was worth, and, therefore, he had suffered no pecuniary damage by reason of their false representations and hence was not entitled to relief. In reply to this contention, Mr. Justice HEYDRICK, in the opinion, says: "But it is such injury as will be redressed to obtain from an owner, by a false representation of a fact which he deems material, property which he would not otherwise have parted with upon the terms which he is thus induced to accept." In Sutton v. Morgan, 158 Pa. 204, the court rescinded a sale of real estate on a bill by the vendee, who was induced to purchase land on the false representations that there was a large demand for building lots on the property, that railroad shops were to be built in the neighborhood, and that a certain large sum had been offered for the property. As to adequacy of the remedy at law ousting the jurisdiction of equity, it is said in 24 Am. & Eng. Ency. of Law (2d ed.), 642: "To justify a court of equity in denying the relief by way of rescission or cancellation it is not enough that the...
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