Molly v. Ulrich

• Decision Date: 03 March 1890
• Docket Number: 248
• Citation: 19 A. 305,133 Pa. 41
• Parties: CHARLES F. MOLLY v. GEORGE B. ULRICH
• Court: Pennsylvania Supreme Court

19 A. 305

133 Pa. 41

CHARLES F. MOLLY v. GEORGE B. ULRICH

No. 248

Supreme Court of Pennsylvania

March 3, 1890

Argued February 20, 1890

APPEAL BY PLAINTIFF FROM THE COURT OF COMMON PLEAS OF LEBANON COUNTY.

No. 248 January Term 1890, Sup. Ct.; court below, No. 283 June Term 1889, C.P.

On April 20, 1889, Charles F. Molly brought assumpsit against George B. Ulrich, to recover damages for the breach of a parol contract to convey real estate. Issue.

At the trial on November 15, 1889, the plaintiff's case in chief was briefly as follows: On November 6, 1888, the plaintiff obtained the note of the defendant to the plaintiff's order for the sum of $500, said note to be discounted in bank for the plaintiff, who was in need of money. As security to the defendant, the plaintiff executed and delivered to him a conveyance in fee-simple of property the plaintiff owned in Annville, under a parol agreement, made at the time, that the defendant should not have the deed recorded, and when the note was paid by the plaintiff the defendant should re-convey the property to him. This property so conveyed was subject to a mortgage for $1,300. The note obtained by the plaintiff was discounted, and he received the proceeds of it. On November 12, 1888, the defendant had the plaintiff's deed to him recorded. A week or ten days before the note matured, the defendant informed the plaintiff that if the latter wanted to continue the loan he could do so, which was done by a new note of the same form as the first, given to the bank as a renewal thereof. Before this renewal note matured, the defendant paid the amount of it to the bank and lifted it. In the spring of 1889, the defendant went into the property as a tenant, under a prior arrangement with the plaintiff that he should pay a fair rent for it, the plaintiff telling him, at the time, that he was trying to sell the property, but if he succeeded he would use his influence with the purchaser not to increase the rent upon the defendant. In April, 1889, the plaintiff sold the property to one Millard for $2,500. He had then but lately discovered that his deed to the defendant was upon record. The plaintiff and Millard went together to the defendant and tendered to him the amount due upon the note which the defendant had lifted, and demanded a re-conveyance of the property according to the terms of the parol agreement. The defendant then and afterwards refused, either to re-convey the property to the plaintiff, or to convey directly to Millard. Thereupon, the plaintiff brought this suit.

At the close of the plaintiff's testimony, the court, McPHERSON J., on motion of defendant, entered judgment of nonsuit, with leave, etc.

A rule to show cause why the judgment of nonsuit should not be lifted having been argued, on December 14, 1889, the court McPHERSON, J., filed the following opinion:

This action was brought, and tried, upon the theory that the defendant had broken a parol contract for the sale of real estate, and that the plaintiff was entitled to recover damages for such breach. From all the testimony, however, it is perfectly apparent that the real transaction between the parties, so far as disclosed, was a parol mortgage, and that the contract sued upon was not a separate, independent agreement, but an indivisible part of a larger agreement which included a conveyance absolute on its face from Molly to Ulrich in consideration of a loan of money by Ulrich to Molly, and a contemporaneous parol agreement by Ulrich to reconvey to Molly, when the latter repaid the money. Of course, it is easy to separate in thought the parol agreement from the deed, but to treat them as really distinct for purposes of suit is wholly to change the transaction, and to impute to the parties an intention of which the testimony does not show a trace. As all the evidence at present before us plainly shows, they intended to make and did make a parol mortgage. While this suit supposes two distinct agreements, the plaintiff separates one of them, viz.: the parol defeasance, and proceeds upon it as if it were an independent contract to convey, instead of being, as it is, a dependent contract to reconvey.

As might be expected, this effort to apply to a parol mortgage the principles which govern a different kind of contract does not work smoothly, and it breaks down entirely when the question of damages is reached. Upon this point it is well settled in Pennsylvania, that if the vendor breaks a parol contract to convey, in the absence of fraud he can only be called upon to compensate the vendee "for the actual loss sustained, such as the payment of money and expenditures and expenses incurred on the faith of the bargain:" Meason v. Kaine, 67 Pa. 132; and is not liable for the value of the vendee's bargain: Ewing v. Thompson, 66 Pa. 382. But this measure would not satisfy the plaintiff's claim, or fairly meet his right, if he has any right at all, in a case like the present; for, under the rule, he could only recover nominal damages, because he has spent nothing upon the faith of Ulrich's alleged promise to reconvey, while his right, if any exists at all, would certainly go much further. The plaintiff, therefore, frankly takes the position that the rule above cited must be changed so as to allow him to...