LaCourse v. Kiesel
| Decision Date | 02 January 1951 |
| Citation | 366 Pa. 385,77 A.2d 877 |
| Parties | LACOURSE et al. v. KIESEL et al. |
| Court | Pennsylvania Supreme Court |
Bill in equity by A. J. LaCourse and another against Anna M Kiesel and others, for cancellation of an agreement of sale of property and for return of sums paid on ground of alleged misrepresentation that the property was usable for apartments whereas it was subject to single residential restrictions. From a decree of the Court of Common Pleas No. 7 of Philadelphia County (In Equity) at No. 2615 December Term 1948, Sloane, J., for the plaintiffs, the defendants appealed. The Supreme Court, Ladner, J., at the January Term 1950, No. 232, held that plaintiffs were entitled to rescind the agreement.
Decree affirmed.
Martin F. Papish, Philadelphia, for appellants.
Donald W. Hedges, Russell Conwell Cooney, Mancill, Cooney, Ott & Smans, all of Philadelphia, for appellees.
Before DREW, C. J., and ALLEN M. STEARNE, JONES, BELL, LADNER and CHIDSEY, JJ.
From the findings of the learned chancellor supported by adequate evidence and approved by the court en banc, we state the following facts: The defendants, Anna M. Kiesel, William Kiesel, Jr., and Ruth R. Kiesel, hereinafter referred to as individual defendants, being owners of premises 101 Montgomery Avenue, Bala Cynwyd, Pa., engaged Louis Traiman Auction Company of Pa., hereinafter referred to as Traiman Company, to act as their agent in advertising and selling their property at public auction. Traiman Company prepared a handbill advertising the property which contained among other statements, the following: ‘ An unusually desirable property, ideal as a private home, excellent for a professional man, also splendid for apartments which would bring in a handsome income in addition to providing beautiful living quarters for the owner.’ William Kiesel, Jr. one of the owners, informed Traiman Company that the property was zoned R-5 which permits apartments, that there were apartments in the property and that other properties in the area, including the adjoining property, were apartment houses. The handbill prepared by Traiman on this information, among others, was read to prospective bidders by representatives of Traiman at the auction sale held June 29, 1948, on the premises.
The plaintiffs, A. J. LaCourse and Benjamin M. Snyder, Jr., attended the auction sale, had examined the handbill advertising the sale and heard it read by the auctioneer. They also made an inspection of the premises and then entered into competitive bidding and the property was knocked down to them as the highest bidder at $33,000. The vice president of the Traiman Company then presented a form of agreement of sale to plaintiffs for execution which was executed by Traiman as agent for the owners and by the purchasers, who paid a deposit of $5,000 at that time. The agreement of sale, among other things, contained a clause that the property was sold ‘ free and clear of all liens and encumbrances, except as otherwise herein stated, but to be subject to all existing restrictions, easements, zoning regulations, and, ordinances, statutes, regulations of any constituted public authority now in force or which may be passed prior to final settlement.’ The agreement also contained the provision that the title should be ‘ good and marketable and such as will be insured at regular rates by any responsible Title Insurance Company’ etc.
Thereafter the plaintiffs applied to the Commonwealth Title Company of Philadelphia, and from the information certificate sent them learned for the first time that the restrictions prohibited the use of the property other than as a single residence. Prior to the receipt of this information the plaintiffs had engaged an architect to prepare plans for the conversion of the property into apartments, which services were discontinued later, because of the restriction and a bill for $215 paid him. Upon learning of the restrictions plaintiffs promptly offered to rescind the agreement of sale or to allow the defendant owners additional time to remove the restrictions. Defendants were not able to have the restrictions removed and called upon plaintiffs to make settlement subject to the restrictions. Plaintiffs then brought a bill in equity against the defendants for cancellation of the agreement of sale and return of the deposit money as well as the sum of $215 paid to the architect and $30 paid to the title company. The chancellor found for the plaintiffs and entered a decree nisi against the individual defendants which requires them to return to the plaintiffs the $5,000 deposit money with interest and the further sum of $245 above mentioned, to which decree nisi exceptions were filed as well as to the adjudication and findings, all of which were considered by the court en banc and dismissed, and the decree nisi confirmed absolutely. From said action of the court we have this appeal.
The appellants argue first that the representation in the auctioneer's circular read to the bidders was not a material misrepresentation. The learned court held that it was material. We find no difficulty in agreeing with the court below. The language of the circular was equivalent to a statement that there were no legal obstacles in the way of the use of the property being sold for apartments. Any fair-minded person would naturally assume from the statement that the property was ‘ splendid for apartments which would bring in a handsome income in addition to providing living quarters for the owner,’ that the restrictions mentioned did not prohibit such use. Otherwise, neither the auctioneer nor the sellers would have been justified in making the statement complained of. Counsel for the appellants argues that neither the owners nor the auctioneer knew that the restrictions prohibited said use and therefore made the misrepresentation innocently. But the owners were bound to know what the restrictions provided. Moreover, whether the auctioneer or the owners knew that the representation was false has been repeatedly held in this jurisdiction to be a matter of no consequence. A vendor has no right to make such a statement of which he has no knowledge: Braunschweiger v. Waits, 1897, 179 Pa. 47, 36 A. 155; Jack v. Hixon, 1903, 23 Pa.Super. 453, 456; 3 Pomeroy's Equity Jurisprudence, 5th ed., sec. 889. So also we have repeatedly held there is no obligation on the part of the purchasers to examine public records before purchase: see Lake v. Thompson, Pa, 77 A.2d 364; Merritz v. Circelli, 1949, 361 Pa. 239, 64 A.2d 796, 7 A.L.R.2d 1325; Suraci v. Ball, 1947, 160 Pa.Super. 349, 51 A.2d 404.
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