Parcham et ux. v. Schmelzer et al.

• Court: Pennsylvania District and County Court
• Writing for the Court: Smith
• Citation: 21D.&C.303
• Docket Number: December term, 1930, no. 7420.
• Decision Date: 04 May 1934
• Parties: Parcham et ux. v. Schmelzer et al.

21 D.&C. 303

Parcham et ux. v. Schmelzer et al.

December term, 1930, no. 7420.

The Judicial Districts of Pennsylvania.

May 4, 1934.

Real property — Parol contract — Agreement for purchase at sheriff's sale and assignment of bid — Enforcibility — Source of purchase money — Constructive trust.

1. A parol agreement, by the terms of which plaintiffs refrained from bidding at a sheriff's sale in foreclosure of a mortgage upon premises owned by them, in consideration of defendants' agreement to purchase the property and assign the bid to plaintiffs, may not be enforced in equity unless plaintiffs furnished the funds used in acquiring title.

2. A purchaser of real estate does not become a trustee for one to whom he previously agreed to assign his bid or to convey title, unless the purchase was made with the latter's money.

Preliminary objections to bill in equity. C.P. No. 5 of Philadelphia County.

Louis Sherr, for plaintiffs; James R. Wilson, for defendants.

SMITH, P.J., May 4, 1934.

This matter comes before us on preliminary objections to an amended bill of complaint.

The amended bill avers that on November 16, 1920, the petitioners (and Anna Knorpp, now deceased) purchased from George Schmelzer and Sophia, his wife, a property situate at 2323 South Sixty-third Street, in the City of Philadelphia for $4,200, upon which amount they paid $3,200 in cash and the balance of $1,000 by a purchase-money mortgage dated November 16, 1920, and properly recorded; that the said deed of conveyance was also recorded and contains the following provision: "Unto the said grantees and the survivor of them and the heirs and assigns of such survivor"; that Anna Knorpp died January 13, 1932, leaving her surviving the plaintiffs; that in December 1930 David Watson, defendant, acting as agent for the Schmelzers, proposed that the petitioners borrow $2,000 from the Schmelzers to repay the mortgage of $1,000, delinquent taxes, water rent, and interest accrued on said premises, and costs and bonus charges for placing the new mortgage of $2,000 on said premises, and petitioners agreed to such proposal; that during April 1921, to consummate the foregoing agreement, the said Watson, acting as agent for the Schmelzers, suggested that the Schmelzers should foreclose premises 2323 South Sixty-third Street for the purpose of clearing the title, that petitioners should refrain from bidding, and that after the sale the bid would be assigned to petitioners and a new mortgage of $2,000 placed by the Schmelzers in favor of the petitioners for 3 years, secured on the aforesaid premises, and that the $2,000 would be applied to the repayment of the mortgage loan of $1,000, payment of delinquent taxes and interest, and bonus charges and costs; that petitioners were persuaded to agree to Watson's proposal, as agent for the Schmelzers, placing reliance in his honesty and believing his representations were made in good faith; that the representations of Watson, as agent, were misrepresentations made for the purpose of defrauding petitioners of their property and in fact, as a result of agreeing to the said proposal, petitioners were fraudulently deprived of their interest, equity, and title in 2323 South Sixty-third Street, were defrauded of other sums of money, and otherwise injured; that pursuant to the suggestion of Watson, as agent for the Schmelzers, the Schmelzers entered judgment against the petitioners and on February 25, 1931, assessed damages in the sum of $1,066.50 as of this court, term, and number; that foreclosure proceedings were instituted and the said premises sold by the sheriff on May 4, 1931, and purchased by the attorney on the writ for $50, petitioners refraining from attending the sale and bidding on the premises pursuant to the aforesaid agreement; that on May 11, 1931, the Schmelzers took title to the said premises from the sheriff and still are the present owners of record of the said premises; that at the time of the sheriff's sale the said premises had a market value of $3,500 and that the present value thereof is $3,000; that after the sheriff's sale petitioners requested defendants by correspondence to carry out the terms of the said agreement, but defendants refused and still refuse to carry out said terms, whereupon, on March 1, 1933, plaintiffs filed a rule to open...