Quaker City Apartment House Co. v. Matthews , 1902 Pa. Super. LEXIS 400 ( 1902 )

Opinion by

Rice, P. J.,

In an action of assumpsit on an agreement to subscribe to the stock of a foreign corporation not registered in Pennsylvania, it appeared from the statement of claim that the prospectus which was attached to and made part of the subscription agreement contained the following representation : “ The company has purchased the property corner of Thirty-sixth and Chestnut streets, for the purpose of erecting thereon the Norman-die Apartment House, and now offers for sale 20,000 shares of six per cent preferred stock at 15.00 per share.” It was further alleged in the statement of claim, “ that the Normandie Apartment House is being erected at the present time in all respects in accordance with the terms of the prospectus aforesaid.” It was averred in the second supplemental affidavit of defense, that without the above representation the defendant would not have signed the subscription agreement, that the representation that the plaintiff company had purchased said property was false and “ that it had not at that time nor has it since purchased said property, nor could it then nor at any time since purchase or own said property, on account of its being without authority to own real estate in Pennsylvania, and the defendant further avers that the Normandie Apartment House is not being erected by the plaintiff as set forth in the prospectus aforesaid, but that the said property is owned and registered in the name of the Normandie Apartment House Company, another and a different corporation by which the said apartment is being erected on the lot aforesaid.” Whatever may be said of the defenses set up in the original and first supplemental affidavits of defense, we think it clear that the averments above referred to and quoted were sufficient to prevent summary judgment and entitle the defendant to a jury trial. The obvious inducement to the defendant’s subscription was that the company had purchased the land described and was about to erect an apartment house thereon. The money was to be used for that purpose. The representation was not merely that of an officer or agent of the corporation but was part of the contract itself. The plaintiff recognized its materiality when it alleged in its statement of claim, that the purpose for which the subscription was given, was being carried out, but the truth of that averment, as well as the truth of the representation contained in the prospectus, was put in issue, as we have seen, by an affidavit which was as clear, broad and explicit as the statément of claim itself. We have no right to assume, as is suggested in the argument of plaintiff’s counsel, that the Normandie Apartment House Company is a “ Pennsylvania straw corporation,” whatever that may be, “ the entire capital of which is owned and controlled by the Quaker City Apartment House Company.” We express no opinion as to what would be the effect of proof of such facts. It is sufficient for present purposes to say that if the defendant can prove the facts alleged by him and nothing is shown by the plaintiff to rebut the effect of such proof, he will have established a complete defense. As the case stands the plaintiff is asking to enforce a contract induced by a false statement which was not merely a misrepresentation of a fact but is one of the terms of the contract, a condition which it has not performed and is unable to perform. That this cannot be done is clear both upon reason and authority. See Manheim, etc., Plank Road Co. v. Arndt, 31 Pa. 317, Caley v. Phila. & Chester Co. R. R. Co., 80 Pa. 363, 368, Auburn Bolt & Nut Works v. Shultz, 143 Pa. 256, and Spellier Electric Time Co. v. Leedom, 149 Pa. 185.

Judgment reversed and procedendo awarded.