Big Mountain Improvement Co.'s Appeal , 54 Pa. 361 ( 1867 )

The opinion of the court was delivered, by

Thompson, J.

The plaintiff’s bill contains a variety of'matters in regard to which relief was prayed, but was refused by the master, with a single exception, for good reasons, as his. report abundantly shows, and affirmed by my brother Strong on a hearing at Nisi Prius. The subject excepted from this result was a prayer for an injunction to restrain the defendants from prosecuting an action of ejectment brought in Northumberland county for the recovery of the possession of about three acres of land, occupied by the plaintiff as the site of a coal-breaker and connecting improvements.

These works, the plaintiff alleges, were erected on the ground in controversy with the full knowledge, acquiescence and assent of the defendants. The main argument here was upon this point, and as we think the other subjects of the bill were properly disposed of and need no further examination, we will confine what we have to say to this one question exclusively. The facts found by the master show that the appellants on the 6th December 1853 contracted with the owners of the “ Gray” tract, situate in Coal township, Northumberland county, for the purchase “ of ten acres of surface right” of the tract in fee; the extent of which grant is explained in the articles of agreement as follows: “ The surface right hereby granted shall not be deemed or taken to be a right granted to said company for the purpose of laying out a town, or building thereon, but only for the purpose of a coal-breaker and dirt-room for the deposit of coal-dirt.” This was but the grant of an easement although described to be in fee, which is generally defined to be “ a liberty, privilege or advantage which one may have in the lands of another without profit:” Gale & Whatley on Easements 6.

Under this grant, accurately defined by a survey, the defendants erected at the south-eastern end a coal-breaker in 1854, and continued the occupancy of the land until after their breaker was burned down in 1860, when they erected a new breaker at a different place on a different tract, and since then have occupied the ground but little, if any.

Prior to 1859, the complainant became the purchaser in fee of the “ Gray” tract without any reservation in his deed or notice in the title of the previous grant of the surface right in the ten acres to the defendants. This is not, however, of much consequence (in the case, as the company’s possession was notice of their right. Early in 1859, the complainant entered upon the north-eastern end of the ten acres sold to defendants, with a view to the erection of a coal-breaker preparatory to mining from the Gray tract, the fee of which he owned. The circumstances of the entry are not distinctly proved by the master; but the plaintiff’s bill alleges it to have been made pursuant to a parol contract • for an exchange of lands between the plaintiff and defendants, contemporaneously with an agreement to refer certain matters in variance relative to “damages for trespass outside of the ten acres,” dated the 10th of February 1859.

Although this restriction as to the damages for trespass looks like the admission of the existence of a contract of some kind in regard to the plaintiff’s entry, yet the contract of exchange is distinctly denied in the answer, and not found by the master; or rather the master finds against the existence of such a narol contract with such part execution as would take it out of . i operation of the Statute of Frauds and Perjuries. Whatever there was like a contract between the parties, it was defective as a complete parol contract wanting in certainty as well as of possession taken pursuant and under it. At this time authorities are not needed to prove that these objections are fatal to an alleged parol sale, and not the less so to a parol contract for the exchange of land. Under this state of proof we think the master could have done no otherwise than to have found against the plaintiff on the allegations in the bill of an executed parol exchange.

This brings us to consider whether, although such a parol contract as avoids the statute was not shown by the plaintiff, yet whether there was not such an agreement between the parties and such promises by the defendants to accept “ other land” in exchange for that taken possession of by the plaintiff, together with such encouragement in an expenditure of money and labor by the plaintiff on the faith of such agreement and promises of the defendants as would render it inequitable and a fraud upon him to permit the latter to revoke their promises and disturb his possession ? The master finds this point in favor of the plaintiff, and we think upon abundant testimony. As already said, the agreement of reference excluding trespasses on the ten acres looks like an acknowledgment of an agreement that the plaintiff was not considered a trespasser, and he was probably in the possession at that time. But on the 11th of March, when the parties and arbitrators met on the ground to view the alleged cause of damages on account of trespasses committed by the parties on each other, and to determine all “ cause and causes of action both in law or equity or otherwise” between them, they were distinctly informed by the president of the company, in presence of the plaintiff, and assented to by the latter, that the arbitrators were to have nothing to do with the matter of their surface right; that that matter had been arranged and was not before them ; that Mr. Baumgardner and himself had arranged it; that the superintendent, Mr. Van Gaskins, was to stake out the ground which Baumgardner was to give the company in exchange for that occupied by him on the ten acres. “We are to give him,” said Jenks, the president, according to the testimony, “ the surface right for his breaker and improvements, and we arc to take other ground. But this is agreed upon, and you have nothing to do with it.”

The arbitrators acted and made their award without taking into consideration the alleged trespass of the plaintiff, and he went on without let or hindrance, or notice of objection by the defendants, and completed his breaker in the July following, at a cost of from $14,000 to $16,000. This conversation took place within a very short time after the plaintiff had entered into the possession, and nearly .whole expenditure was made subsequently. Although this conversation or agreement was not binding at law, for want of writings, yet it is in conscience, so far as to preclude the defendants from taking advantage of the want of a contract that would bind them to convey the land. They could only avoid its effect in equity by evidence of bad faith on part of the plaintiff. That does not appear against him. On the contrary, he ran out an equivalent in extent to the land occupied by him on another part of the tract for the defendants, which they refused; and afterwards he assented to the staking out by superintendent Van Gaskin of land selected by him after the works were completed. It will be remembered that he was the party to do this on part of the company at the arrangement disclosed before the arbitrators. It was not until the breaker was erected, and all the expense incurred, and disputes had again arisen between the parties about other matters, that an intention was manifested by the defendants to reclaim the land on which the plaintiff’s coal-breaker had been erected by bringing their ejectment for it. It was too late then to hope to succeed in that undertaking.

On a kindred point, Gibson, C. J., in Swartz v. Swartz, 4 Barr 358, said: “ The principle of the case is, that the revocation would be a fraud, and to prevent that a chancellor will turn the owner of the soil into a trustee ex maleficio.” So in MeKellip v. McCheney, 4 Wright 317, after referring to the doctrine of an equitable defence, in Todd v. Strickler, 10 S. & R. 74, Kennedy, J., said: “ In Rerick v. Kern, 14 S. & R. 267, it was held that a parol license given without consideration to use the water of a stream for a saw-mill, in consequence of which the grantee went to the expense of erecting a mill, could not be revoked by the grantor at pleasure.” * * * * These cases are likewise a sufficient answer to the objection, that the privilege claimed to have been granted here was either an incorporeal right, and if so, ought to have been granted by deed, or if not, it was an interest in land, and ought therefore to have been granted at least by a writing signed. They also show that whenever a party has induced another to repose upon the faith of his promise, though verbal, to expend his money or labor, for which he can only be remunerated by the enjoyment of the thing so promised, equity will compel the promissor to give such a deed or writing as shall be requisite to secure the promissee.

Without stopping to inquire whether a decree for a conveyance under the circumstances presented by the case before the learned judge is the usual remedy or not, there are numerous authorities, and those cited by the counsel for the appellee are full to the point, that a party by whose encouragement expenditures have been made to such an extent as are not capable of reimbursement except by enjoyment, will be enjoined from disturbing the possession. Equity estops him because he would wrong the other party by withdrawing his consent: Trexel v. Lehigh Iron Co., 6 Wright 513. There is no higher morality than is contained in the equitable principle that where between two innocent parties a loss occurs, it is to he borne by him whose act occasioned it. The morality of the rule which throws the loss upon him who occasions it, is certainly much less questionable where it results from bad faith or fraud. The result is the same ; the protection of the innocent being the object of the rule in both cases. We agree with the court below and the master, that the defendants should be estopped, under the circumstances disclosed and found by the master, from proceeding in the action of ejectment against the plaintiff.

It is objected to this, however, that in the action of ejectment this equitable principle can he administered, and therefore the plaintiff has an adequate remedy at law. To this we cannot agree. The writ of ejectment is the process of the plaintiff. The defendant cannot use it to settle his equity in the premises. He must wait until it pleases the plaintiff to proceed, and when he does, he may withdraw his suit at will, and renew the contest again and again, until three verdicts or the Statute of Limitations puts an end to the controversy. At no stage is a definite result achieved so as to put an end to controversy until the game of three verdicts is played out. While, therefore, ejectment subserves an important purpose in the administration of equitable principles, it is not to a defendant an adequate remedy in its administration, for the reasons given. If he have a good equitable defence, why shall not a defendant have it so administered as to be available and save him from repeated attack ? It is better for all parties that litigation be avoided — interesse respublica ut sit finis litium. Under the Act of 16th June 1836 the courts are invested with full chancery powers over corporations ; see Commonwealth v. The Bank of Pennsylvania, 3 W. & S.; and can supervise and control them through the equity powers conferred by the act as fully as a Chancellor of England could do in the exercise of his functions. May we not, therefore, stay the hand of a corporation from doing an unreasonable thing outside of its ordinary business sphere as well as within it ? No limitation of this nature is found in the act. The plaintiff brought his bill against the defendants for an account and sundry other things, among them the matter in hand. There was no doubt of the court’s jurisdiction as to most of them, and it is not a reason for dismissing the bill that but one matter remains for a decree. There was no demurrer or special defence as to that, and the parties having submitted to the jurisdiction and answered fully, and exhibited their proofs, the case is undoubtedly in a position to be disposed of according to equity.

This is not added to raise a doubt of our right to enjoin the defendants from proceeding in their ejectment suit, but qudcunque vid datd, we are authorized to decree conformably to equity as between the parties. We are for sustaining the decree at Nisi Prius, and it is accordingly affirmed. The costs of this appeal to be paid by the appellant.