Mensch v. Gail

The amended bill filed in this cause alleges that the complainants, James G. Mensch, Ella M. Shimer, Allen R. Shimer, Katie M. Mensch, Vinnie O. Mensch and Norris-town Trust Company, a corporation of the state of Pennsylvania, testamentary guardian of Rita C. Mensch, minor daughter of P. Calvin Mensch, deceased, being seized in fee of a certain gristmill and tract of land situate in the county of Montgomery and Commonwealth of Pennsylvania, entered into an agreement with Theodore Gail and Letitia Gail, respondents, on or about the 4th day of October, A.D. 1904, with respect to. the sale and purchase of said property, and that on or about the 14th day of November, A.D. 1904, “the agreement of sale and purchase was consummated, all parties thereto being present or represented by their respective agents,” and that the complainants “at that time signed, sealed, and delivered good and sufficient title deeds to said real estate, which said deeds were duly accepted by the said respondents, and possession of the said real estate was thereupon given to said respondents,” and “that the said respondents, having accepted the title deeds to said property, delivered to the complainants a certain check or order drawn on the Security Trust & Safe Deposit Company, a corporation of the state of Delaware, one of the respondents above named, located and doing business in the city of Wilmington, in the said state of Delaware, for the sum of $6,500, being the whole consideration agreed upon for the purchase price of said real estate, which said check or order was signed by Theodore Gail aforesaid, and duly presented for payment at the drawee, the said Security Trust & Safe Deposit Company, and payment thereof was by said drawee refused, and said check or order was protested.” It is further alleged that the check is still due and wholly unpaid, and “that at the time it was

The prayers of the bill, in addition to the usual prayers for subpoena, answer, and further relief, are as follows: “(2) That the respondent may be decreed to pay to your orators the said sum of $6,500, together with interest from the day the same should have been paid, to wit, the 14th day of November, A.D. 1904, and the costs of this suit; (3) that the respondents and each of them be restrained by injunction of this honorable court from transferring, paying out, or otherwise distributing the said sums of money on deposit in the names of the said Theodore Gail and Letitia Gail, or either of them, in the hands of the said Security Trust & Safe Deposit Company; (4) that the said Security Trust & Safe Deposit Company, Theodore Gail, and Letitia Gail, any or all of them, may be decreed to hold the said funds as trustees for the vendors of the said real estate, your "orators,' and may be ordered and directed to pay the

Upon presentation of the bill the chancellor ordered that a rule issue directed to said respondents requiring them to show cause why a preliminary injunction should not be granted as prayed for, and granted an order restraining the said Theodore Gail, Letitia Gail, and Security Trust & Safe Deposit Company from transferring, paying out, or otherwise disturbing the said sums of money on deposit in the hands of the said Security Trust & Safe Deposit Company until the further order of the chancellor. No answer was filed, but the motion for a preliminary injunction was heard on bill, affidavits, and exhibits.

The affidavits filed by the respondent allege that no written agreement for the purchase of the said property was ever made by them, or either of them, and deny that the title deeds for the property were ever delivered to them, or either of them, or to their agents, or that possession was given to them, and the said respondent Theodore Gail deposes in an affidavit, as follows: “That he did not accept the title deeds for said property, as alleged in said bill, and that they were never delivered to him or to1 the said Letitia Gail, or either of them, or any person for him, her, or either of them, but were and are held by the said complainants, or one of them; that after said check for $6,500 had been signed by the said Theodore Gail, and the complainants or some person for them had gotten it in their possession, then they informed your deponent for the first time that the town of Greenville, in the state of Pennsylvania, had the right to take from the dam, belonging to said mill, 100,000' gallons of water each day; that he then demanded that his check which they had obtained from him by fraudulently representing that the title to said water power was good, as aforesaid, be returned to him, and he then and there declined to proceed further, on account of said defect in the title to said water right; that said complainants and those representing them declined and refused to return said check so fraudulently obtained from him, as aforesaid, and that he ordered the Security Trust & Safe Deposit Company, on which said check was drawn, not to

The motion for a preliminary injunction has been argued twice, and several questions of law concerning the doctrine of specific performance have been argued at great length; the briefs of counsel, particularly at the last hearing, marshaling the authorities bearing upon every part of that branch of equity jurisprudence not already settled by the admirable decisions which have enriched the reports of this court. I have devoted a great deal of time tO' the careful examination of these questions, and have pursued my investigation beyond even the wide range of authorities discussed by counsel, or contained in their briefs, but their adequate treatment would require an opinion of most unusual length, and at the same time their determination would be futile as subject to the criticism of being obiter dicta, the determination of points not necessary to be determined in the pending motion or cause, unless the facts presented should be held by me to be such as to^ require their determination. I will therefore proceed at once to the consideration of the affidavits and exhibits, and make a summary statement of the material facts presented at the hearing of the rule, dealing first with those that are undisputed before taking up those that are contradicted.

In the first place, it is not alleged in the bill that an agreement in writing was entered into1 with Theodore Gail and Letitia Gail, the respondents, although it is urged by one of the counsel for the complainants that the letters of Theodore Gail, when taken in connection with those of Elinor J. Lutes, agent of complainants, constituted an agreement in writing. There is no letter, however, which, either when standing alone or taken in connection with those of the agent of the complainants, contains all the material terms of a contract, and, in

The material facts in the case, as presented at the hearing of the rule, which are admitted and not contradicted, are as follows :

The said respondent Theodore Gail, resident in the city of Wilmington, in this state, in consequence of an advertisement appearing in a Philadelphia newspaper, entered into negotiation with a Philadelphia real estate agent, in whose hands the property in dispute was placed for sale by the complainants, and after a great deal of correspondence and a number of interviews, covering a period of several months, during which the said Gail visited the mill property, conversed with the tenant of the mill, and made a personal examination of the premises with a view to purchasing them to be used as a gristmill. One of the complainants, the Norristown Trust Company, guardian of Rita C. Mensch, one of the owners, was employed by Gail to search the title, and on November 11th he was notified by Elinor S. Lutes, the said real estate agent, that she had received the “certificate of settlement of his title insurance” from the said Norris-town Trust Company, and he was requested by her to come to- Norristown on the following Wednesday and make settlement for the property and receive the deed. On November 14th Gail went to Norristown for that purpose, and at the meeting held for settlement all parties were present or represented, those present including the said James G. Mensch, one of the owners, the said Elinor S. Lutes and F. G. Hobson, now deceased, treasurer and trust officer of the Norristown Trust Company; and when Theodore Gail left the meeting for his home in Wilmington, his check for the full consideration agreed upon, $6,500, was in the hands of the complainants, and the deed for the property in the possession of the Norristown Trust Com-

It further appears that in March, 1903, one year and seven months prior to the date of settlement, the owners of the mill property had received the sum of $1,500 as compensation for impairment of their water power, caused by the piping of the water of Perkiomen creek, the source of the water power of the mill, to the borough of East Greenville. A certified copy of all the legal proceedings had in this matter of the impairment of complainants’ water power by the borough of East Greenville was presented at the hearing, and discloses the fact that the complainants, James G. Mensch, Ella M. Shimer, Katie M. Mensch, and Vinnie O. Mensch and the said Norristown Trust Company, as executor and trustee under the will of P. Calvin Mensch, filed a petition in the court of common pleas of Montgomery county, Pa., in which they stated that the borough of East Greenville was piping water away from Perkiomen creek at a point about a mile or more above the mill, and alleged that “in consequence of which your petitioners’ gristmill is frequently unable to run on account of the insufficiency of water supply furnishing power,” and prayed for viewers to be appointed to> assess damages. This was done and $2,400' allowed, which on appeal was subsequently reduced to $1,500 by the verdict of a jury. It further appears that the borough of East Greenville is about one mile and a half from the bank of Perkiomen creek, and the water is piped from the bottom of the creek some distance from the shore, so that the piping is not visible. The so-called “certificate of settlement of title insurance” signed by the Norristown Trust Company contains no- reference to this impairment of the water power of the mill, and paragraph 10' of the certificate reads as follows: “Note. The insurance under this application will be restricted to the fee of the land only, and will not apply to the machinery or the water right and privileges applicable thereto” —but it appears from the affidavit of the assistant title officer of the Norristown Trust Company, Margaret Potter: “That during the settlement F. G. Hobson, Esq., who was the title officer and trust

With regard to1 the alleged delivery of the deeds, it is uncontradicted, and, in fact, is a matter of record, that the Norristown Trust Company, to whom the deed is alleged to have been delivered as agent for the respondents, was one of the complainants, as guardian of one of the owners of the property, and also one of the petitioners in the proceedings above referred to, which resulted in the recovery of damages for the impairment of the water power of the gristmill, the property in dispute, and the said Trust Company did not have the said deed recorded.

For guidance in the exercise of the jurisdiction of the Court of Chancery to compel specific performance of contracts, it is not necessary to go beyond the former decisions of this court. As was said by the chancellor in Diamond State Iron Co. v. Husbands, 8 Del.Ch. 205 , 223, 68 Atl. 240 , 245: “The nature and judicial history of this whole branch of equity jurisprudence, especially with reference to the character of the judicial discretion to be exercised by the court in administering it, have been examined by Chancellor Bates in the exceptionally able and painstaking opinion delivered by him in Godwin v. Collins, 3 Del.Ch. 189 , a case affirmed by the Court of Errors and Appeals in a long opinion delivered by Chief Justice Gilpin, whilst the opinion of the chancellor was quoted by Mr. Justice Field with emphatic approval in Willard v. Tayloe, 8 Wall. 566 [ 19 L.Ed. 501 ]. Subsequently the subject was further discussed in different aspects by Chancellor Bates in Crockett v. Green, 3 Del.Ch. 466 , Satterthwait v. Marshall, 4 Del.Ch. 337 , Maxfield v. Terry, 4 Del.Ch. 618 , and also by Chancellor Saulsbury, his distinguished successor, in Connaway v. Wright’s Adm’r, 5 Del.Ch. 472 , McFarland v. Reeve, 5 Del.Ch. 118 , Diamond State Iron Co. v. Todd, 6 Del.Ch. 163 [ 14 Atl. 27 ].” In Diamond State Iron Co. v. Husbands, supra, a bill was filed by the vendor for the purpose of obtaining a decree of this court

In the pending cause it appears from the evidence already referred to that the respondent, Theodore Gail, seeking to' buy a gristmill in another state, for which he had bargained to pay $6,500, went, or was sent by the complainants’ agent, for the purpose of having the title of the property examined, to the Norristown Trust Company, of Norristown, Pa., which was at the same time guardian of one of the owners of the very mill he was seeking to purchase. All the parties concerned were perfectly well aware that the value of the mill to Gail consisted chiefly in its water power. That to him was the essential part of the property, and yet the Norristown Trust Company, one of the complainants, as guardian of one of the owners, undertook to search the title for Gail, and gave him no information of any impairment of the water power until after his check had passed into the possession of the complainants. This omission is emphasized and rendered pregnant by the fact that, not more than two years prior to the meeting had for the purpose of concluding the bargain for the property, the very trust officer who is claimed by the complainants to have been Gail’s agent to receive the deed for him, etc., had joined in a petition affirmed to by James G. Mensch, another of the owners of complainants’ property, which contains the following allegation: “That since the first taking of water from said stream, the said bor

This court is not concerned with what would be the effect of the acts and conduct of the parties, as presented by the evidence, in an action at law to recover damages from the respondents for breach of contract, or in a suit on the check of Theodore Gail. The question before it is, Should a court of equity intervene in any way to enforce this contract, when it has before it the fact that the respondent Theodore Gail appeared at the meeting, the occurrences at which are relied upon by complainants to sustain their claim for the intervention of this court, without counsel or adviser other than complainants themselves and their agents, including the officers of the Norristown Trust Company, and that at such meeting the vital fact of the existence of an impairment of the water power, which, according to the language of the petition to which the trust officer of the very company, relied upon by Gail to inform him as tO' the title, had subscribed, was so serious that the mill was “frequently unable to run on account of the insufficiency of the water supply,” was not communicated to Gail until the complainants had obtained his check? Without further reference to, or analysis of, the affidavits submitted on either side, or considering the other points raised on the questions which might be considered by a court of law, I am clearly of opinion that in view of these central facts which appear from the certified copy of proceedings had in Montgomery county, Pa., and from the affidavit of the assistant trust officer, who was present at the meeting, and other affidavits filed by the complainants, this court ought not to exercise its extraordinary jurisdiction to decree specific performance, nor would it hold that a check obtained under such circumstances constituted an equitable assignment of the fund, but that it should leave the complainants to' their remedy at law.

The motion for a preliminary injunction is therefore denied, and the restraining order heretofore granted dissolved.

Let the order be entered accordingly.