Foll's Appeal

• Citation: 91 Pa. 434
• Parties: Foll's Appeal.
• Decision Date: 17 November 1879
• Court: Pennsylvania Supreme Court

91 Pa. 434

Foll's Appeal.

Supreme Court of Pennsylvania.

October 23, 1879.

November 17, 1879.

October 23d 1879.

Before SHARSWOOD, C. J., MERCUR, GORDON, PAXSON, TRUNKEY and STERRETT, JJ. GREEN, J., absent

Appeal from the Court of Common Pleas of Erie county: Of October and November Term 1879, No. 273. In Equity.

C. B. Curtis and John P. Vincent, for appellant.—The general rule is that equity will not enforce the specific execution of a contract relating to personal chattels: 3 Pars. on Cont. 364.

Neither the counsel for the complainant nor the Court of Common Pleas have been able to refer to any Pennsylvania case in which specific performance of a contract for the sale of stock has been enforced. The case of McGowin v. Remington, 2 Jones 56, relied upon by the court and by the master to sustain such a decree, was a clear and almost undisputed case of a trust.

Brown v. Brown, 2 Casey 77, decides that an act on contract which creates an interest adverse to the interest of the cestui que trust is against public policy.

To give control of this bank to the plaintiff and his friends who seek to obtain control with borrowed capital, would be to endanger the interests of the stockholders and encourage speculation. Every contract is illegal which contravenes public policy, and if there be a probability that it will contravene public policy, the equity powers of our courts certainly cannot be invoked to aid its specific enforcement. If this contract is a legal one, the plaintiff has an adequate remedy at law.

Davenport & Griffith and Benson & Brainerd, for appellee. —A court of equity will decree the specific performance of a contract to transfer railway shares upon the ground that railway shares are not always obtainable in the market: 1 Redf. on Law of Railways 132; Fry on Specific Performance of Contracts 53; 1 Story's Equity 690; Duncuft v. Albrecht, 12 Simons 189.

A specific performance will be decreed "when the party wants the thing in specie and cannot be otherwise compensated; that is, when an award of damages would not put him in a situation as beneficial as if the agreement were specifically performed; or where the compensation in damages would fall short of the redress to which he is entitled:" Phillips v. Berger, 2 Barbour 610; Stuyvesant v. The Mayor et al., 11 Paige Ch. 415; 1 Story's Equity 680; Pomeroy on Specific Performance 9; Weir v. Mendell, 3 Brewster 594; Bank of Kentucky v. Schuylkill Bank, 1 Parsons Equity Cases 220; Sank v. The Union Steamship Co. et al., 5 Phila. 499; Todd v. Taft, 7 Allen 371.

In McGowin v. Remington, 2 Jones 56, this court recognised and established the broad principle that a court of equity will decree specific performance of a contract when the law affords no practical or adequate remedy for its violation. No argument can limit the scope of the opinion in that case to a simple case of trust. The appellant cannot shield himself under the cloak of public policy. He must answer the terms of his contract specifically.

Mr. Justice PAXSON delivered the opinion of the court, November 17th 1879.

This case presents some extraordinary features. We have nothing like it in this state since equity powers were conferred upon the courts. It was a bill to compel specific performance of a contract for the sale and delivery of fifteen shares of the stock of The First National Bank of North East, under the following circumstances: The bank in question is situated at North East, Erie county, Pennsylvania, and has a capital of $50,000, divided into five hundred shares of $100 each. R. M. Greer, complainant below, and appellee, is a merchant in North East, and at the commencement of the year 1877, owned ten shares of the stock of the bank in question. His mother owned sixty-five shares and his brother owned forty. About that time, R. M. Greer conceived the idea of getting enough of the capital of the bank to control it, and to carry out this plan, made an arrangement with his uncle, E. C. Custard, and E. E. Chambers, an operator in oil, to raise sufficient money to buy a controlling interest. They succeeded in buying a considerable amount of the stock, mostly upon borrowed capital, but still lacked the full shares necessary for control. John W. Foll, the appellant, had the requisite number, and on March 7th 1877, Greer and Foll entered into the following contract: "I hereby agree to purchase fifteen shares of The First National Bank of North East, from John W. Foll. The price to be paid is to be $2110.55, and interest from July 20th, at ten per cent.; said stock to be delivered before the second Tuesday of January 1878." This contract was in writing and signed by the parties. Before the time arrived for delivering the stock, Foll informed Greer that he would not deliver it. Foll then made a tender of the money specified in the contract. This bill was then filed and referred to a master, who made his report recommending a decree for specific performance. Exceptions were filed to the report by Foll, which, after a hearing, were dismissed by the court below, the master's report was confirmed, and a decree entered commanding Foll to transfer to Greer the shares of stock referred to. From this decree Foll entered an appeal to this court.

The avowed object of the purchase of the...