Matthews' Appeal , 1884 Pa. LEXIS 26 ( 1883 )

The opinion of the court was delivered January 7th 1884, by

Mr. Justice Paxson.

But for the relation of landlord and tenant, which existed between the defendants below (appellants), and the plaintiffs (appellees), the legal proceedings by which the former acquired the title to the real estate in controversy, could not be successfully assailed. The said proceedings were regular upon their face and sufficient to pass the title. But the Master and the court below held, and we think correctly, that when the appellants entered into possession of the property as the tenants of the appellees under the lease, that a relation of trust and confidence was thereby established between them, which rendered it inequitable in the appellants to combine for the purpose of obtaining the title from the appellees by a judicial sale or otherwise, without notice to them. That such combination was formed and carried out is found by the Master, and is sustained by the evidence. Within a few days after the lease was signed, and the appellants had entered into the possession of the demised pi'emises, the latter commenced their suit against Mr. Aughinbaugh. This they had a right to do notwithstanding the lease, and perhaps without notice to the appellees. But when they proceeded to sell the property, knowing it to be the property of the appellees, and without notice to them, the case is widely different. It would have been a breach of faith to have allowed the property to be sold by the sheriff by any one, without notifying the landlord; much more so to procure such a sale upon their own judgment. Moreover, it clearly appears that the object of their proceeding was to divest the landlord’s title, not to make the money due Mrs. Matthews. Mo other construction can be placed upon the agreement made between the appellants months before the sheriff’s sale, by which Blake Matthews was to execute a declaration of trust that “ he bought at sheriff’s sale, and holds sheriff’s title in trust for his mother, Agnes Matthews;” 2d. That Jake should “assume and perform the work necessary to vindicate that title, including the employment of counsel on contingent contract for fees ;” and, 3d. That, in consideration of the foregoing, Blake was to receive “ one-fifth of the net profits, after deducting attorney’s fees and costs.” Mo argument is needed to show that this looked only to a sale of the property, not to the collection of the inconsiderable sum remaining due Mrs. Matthews from the appellees. And why should the appellants suppose the property would be knocked down at a sheriff’s sale for the low price of the appellant’s judgment, unless the fact of such sale was withheld from the appellees? The property was worth many times the amount of Mrs. Matthews’ judgment; in fact, the appellees had recently paid off several thousand dollars of the liens against it. It is not reasonable to suppose that the appellants could have imagined that the appellees would permit the property to be sold for so inconsiderable a sum, if they had knowledge of the sale. The Master has found the fact that they had no notice of these proceedings, and while there is a conflict of evidence upon this point, the court below declined to reverse the Master’s finding, and we cannot see our way clear to do so. Said finding is strengthened by the fact that the agreement referred to evidently points to a sale of which the appellees should be ignorant. Nor do we see any force in the position that the evidence upon the question of notice was insufficient to overcome the averment of notice in the answer. Several witnesses were examined upon this point; there was enough, if believed, to overcome the answer, and we are not prepared to say the Master erred in this particular.

It is also to be observed that the provision in the lease to Mrs. Matthews by which the rent was to be credited upon her claim was well calculated to throw the appellees off their guard. The Master very properly says: “ The plaintiffs were warranted in believing that the differences between them and Mrs. Matthews had been accommodated, and that there wa.s to be a suspension of hostilities. To bring suit within four or five days after taking possession under this lease was, in the Master’s judgment, a breach of this confidence, and the subsequent divestiture of the plaintiffs’ title without notice to them operated as a fraud.”

It was strongly urged that the plaintiffs below did not come into court with clean hands, and their attempt to enforce the Gallagher mortgage was referred to as evidence of this fact. But the master has found that this was not done with any intention to divest or destroy Mrs. Matthews’ claim. I have examined the evidence upon this point with some care and am of opinion that the Master's finding was justified. This strips this transaction of the garb of fraud, and as no wrong was intended to Mrs. Matthews, it can hardly be held to justify her subsequent conduct.

Were we to permit a tenant to destroy his landlord’s title in this manner we would introduce a principle into our law which could only result in evil, and that continually. The decree does no wrong to the appellants. It places the title back where it properly belongs, bat only upon condition of the payment of Mrs. Matthews’ claim.

The decree is affirmed, and the appeal dismissed at the costs of the appellants.