Chalupiak v. Stahlman
Chalupiak v. Stahlman
Opinion of the Court
Opinion by
Was the business relationship between the defendant, H. C. Stahlman and plaintiff, Paul Chalupiak of such a nature and character which required of defendant the duty of loyalty, fidelity and fair dealing and which precluded defendant from acquiring and enforcing an adverse title to real estate against plaintiff? The court below ruled that defendant owed no such duty and dismissed the bill. This appeal followed.
The commissioners of Beaver County purchased at the county treasurer’s tax sale a tract of land assessed as “land of James Moore Heirs”. There was no description by metes and bounds but eventually it was established that the area consisted of 54.088 acres. Adjoining this land was another tract which was also owned by the county commissioners. Plaintiff was desirous of acquiring the land formerly owned by the “James Moore Heirs” and purchased the same from the commissioners. At the suggestion of the commissioners plaintiff employed a registered engineer to prepare a survey and plan of the tract and he also had the title examined and approved by a lawyer. The survey and plan was inaccurate because it included approximately 30 acres of land not a part of the “Moore tract”. Plaintiff, under the mistaken information thus furnished, was of the opinion that he owned 80 acres of land which he proceeded to subdivide into building lots and sold some of them to purchasers by deeds with general warranty of title. Such conveyances included part of the 30 acres of land to which plaintiff had no title.
It is obvious from his testimony that plaintiff is an unlettered man. Defendant, H. C. Stahlman, on the contrary, in addition to his employment in an adjacent factory or mill, was a justice of the peace and also the tax collector. He maintained a business office
Sometime in 1945, plaintiff called at defendant’s office and requested him to prepare a deed for a subdivision of the land which plaintiff had sold to Adam Adamaitas. Plaintiff brought with him a sketch or plan prepared by his engineer. Defendant examined the plan and concluded that the land proposed to be conveyed did not appear to be part of the “Moore Heirs” tract. Defendant asked plaintiff: “Are you sure that you own this ground?” Plaintiff replied that his engineer had drawn the plan and that his attorney informed plaintiff that he had good title. Defendant did not prepare the deed to Adamaitas and plaintiff employed an attorney for that purpose. However, from July 7 to September 15, 1945, defendant prepared four other deeds for such subdivisions, at plaintiff’s request, from the engineer’s survey. Defendant received $5.00 for each deed except one for which he received $3.00. Title to some of the land purported to be conveyed in these four deeds, as above stated, was then in the commissioners.
In July, 1946 plaintiff brought to defendant a petition to the commissioners to validate title to plaintiff’s land for the purpose of acknowledgment. Defendant read to plaintiff the description of the land described in the petition and showed plaintiff on the borough map that the description indicated that plaintiff did not own the land for which he petitioned to have his title validated. As other errors appeared in the petition, it was not then acknowledged. Defendant informed plaintiff that the land to which title was in question was
On August 28, 1946, defendant had purchased part of the property adjoining the “Moore Heirs” property as agent for his sister who resides in Asheville, North Carolina. On February 26, 1947, defendant purchased another portion of adjoining property in the joint names of himself and his sister. It was this land, or a portion of it, which defendant purchased but which plaintiff had mistakenly considered to be his own and had conveyed to the four individuals as stated above. The court below found that any information obtained by defendant: “. . . as to ownership of land in Baden, was not secured by him from plaintiff. [Defendant] had such information before [plaintiff] came to him to prepare deeds. [Defendant] brought this information to the attention of [plaintiff] on several occasions. [Plaintiff], relying on advice of his engineer and counsel, refused to heed the information given by Stahlman [defendant].”
The fact that defendant, through borough plans, had knowledge of the ownership of lands in the borough is not controlling. Such maps or plans were available to all. It is, however, of paramount importance that — accepting such judicial finding of fact — it was plaintiff’s request to defendant to draw a deed which caused the defendant, in examining the maps and plans of the borough, to recognize the fact that plaintiff’s proposed transfers included land to which he had no title.
In the testimony it appears that defendant also prepared plaintiff’s income tax returns. Defendant stated
At the outset, it must be conceded that if all that defendant did for plaintiff was to act as a stenographer or clerk to fill in blanks in a deed form, defendant would not assume the duties and liabilities of a conveyancer. It is obvious, however, that defendant was employed as more than a stenographer or typist. While perhaps defendant was not acting as a conveyancer, with all the duties and liabilities of a lawyer in such a field: Ladner’s Real Estate Conveyancing VVol. 2, p. 497; LaBrum et al. v. Commonwealth Title Company, 358 Pa. 239, 56 A. 2d 246, yet the testimony is clear that he was more than a mere clerk and stenographer. He was plaintiff’s agent and confidential adviser. Ordinarily it is the grantee who is put to the expense of preparing the deed and searching the title, although in some counties the custom is the reverse: Ladner’s Real Estate Conveyancing Vol. 2 sec. 204 p. 546 et seq. But in any event the plaintiff, the grantor, in this case undertook to have the deed drawn to his buyer or grantee. It was for this purpose plaintiff employed defendant. This made the defendant the plaintiff’s agent. Restatement, Agency, sec. 1, defines an agency relationship as follows: “(1) Agency is the relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.” Here defendant acted, at plaintiff’s request and on plaintiff’s behalf, in drawing the deeds in question, subject to plaintiff’s control. Because of his knowledge as tax collector and as an agent
Comment a reads: “. . . The agent also has a duty not to use information acquired by him as agent or by means of opportunities which he has as agent to acquire it . . . for any purpose likely to cause his principal harm . . . although it is information not connected with the subject matter of his agency..” Cf. Hockenbury v. Carlisle, 5 W. & S. 348; Hill v. Frazier, 22 Pa. 320; Henry v. Raiman, 25 Pa. 354.
It is not of controlling importance that defendant utilized information which related to defect in title. True, defendant was not employed to search title but to prepare or draw a deed. However, this Court, speaking through Justice Sharswood, stated in Smith et al. v. Brotherline, 62 Pa. 461, 469, that “The relation between him and his client is confidential, and whether he acts upon information derived from him or from any other source, he is affected with a trust.” See Restatement, Agency, sec. 395, supra, where it is stated that an agent cannot use information acquired by him during the course of his agency to the injury of the principal “. . . although such information does not relate to the transaction in which he is then employed.” It is important that a full disclosure of information to the conveyancer or agent be required.
Even if we did not attribute to defendant any conscious effort to defraud or take undue advantage of plaintiff, such a transaction cannot stand. It is said in Cleavinger v. Reimar, 3 W. & S. 486, it is not on the ground of fraud, but upon the principles of public policy that, transactions similar to the present are prohibited.
. Katherine Chalupiak, wife of Paul Chalupiak, is necessarily a party plaintiff, and Helen S. Wright, sister of H. C. Stahlman, .is likewise a necessary defendant in the facts of this case.
Decree reversed with direction to the court below to enter a decree in accordance with the prayer of the bill.
Dissenting Opinion
Dissenting Opinion by
I very strongly dissent from the majority opinion’s summation of the facts and its conclusions of law. I cannot find nor could the Chancellor who saw and heard the witnesses, nor the court en banc, any fraud, actual or legal, and certainly no confidential relationship. It is by now hornbook law that “findings of fact by a Chancellor who saw and heard the witnesses, especially when approved by the court en banc, have the force and effect of a verdict of a jury and will not be disturbed on appeal, if supported by adequate evidence”': Roth v. Hartl, 365 Pa. 428, 75 A. 2d 583; Christy v. Christy, 353 Pa. 476, 46 A. 2d 169; Barrett v. Heiner, 367 Pa. 510, 80 A. 2d 729.
Plaintiffs filed a Bill in Equity to compel defendants to convey to plaintiffs certain land which defendants had purchased at a public sale, of which plaintiffs had actual and constructive notice, and with which and over which defendants had no connection or control.
We can best demonstrate how far afield the majority have wandered and how erroneous is their conception and summation of the facts by quoting the Chancellor’s findings of fact verbatim.
“1. The Beaver County Commissioners, on June 13th, 1923, purchased at treasurer’s sale, a tract of land containing 54.088 acres, known as land of James Moore Heirs, situate in the Borough of Baden, in this county.
2. In 1944, plaintiffs desired to purchase the Moore Heirs tract of land, and upon inquiry of the Beaver County Commissioners, were advised to employ an engineer to make a survey of the land.
3. Plaintiffs employed D. C. Washburn, a registered engineer,
* *** * * *
6. On January 26, 1945, plaintiffs purchased from the Beaver County Commissioners 54.088 acres of land in Baden, and known as land formerly of James Moore Heirs.
7. Before purchasing the land from the commissioners, plaintiffs were not advised by counsel, and they did not have an examination of title made.
8. Plaintiffs were erroneously of the opinion that they had purchased the 80 acre tract shown by the Washburn survey.
9. Pursuant to plaintiffs’ direction, Washburn subdivided the 80 acre tract of land so that deeds could be prepared for delivery to prospective purchasers. The subdivision included some land to which plaintiffs did not have title.
10. In 1945, Paul Chalupiak came to the office of defendant, Stahlman, with a sketch made by Washburn, and requested Stahlman to prepare a deed to Adam Adamaitas, et ux. Stahlman examined the sketch, and concluded that the land did not appear to be part of the Moore Seirs tract. Stahlman asked Chalupiak whether or not he was sure he owned' the land, and Chalupiak replied that Washburn had made an error and thereafter had drawn a new map.
11. Later Chalupiak informed Stahlman that his lawyer said his title to the land was good.
12. In the spring of 1946, Stahlman told Chalupiak that Chalupiak did not have title to the lands in question.
13. June 19th, 1945, plaintiffs sold a tract of land containing 2 acres to Adam Adamaitas, et ux. The deed for this tract was prepared at plaintiff’s- request, from
14. July 7th, 1945, plaintiffs sold a tract of land containing 2 acres, more or less, to Julian Tabin. The deed for this tract was prepared by defendant, Stahlman, at plaintiffs’ request, from Washburn’s survey, and he received $3.00 compensation for his services.
15. August 17th, 1945, plaintiffs sold a tract of land containing 5.2 acres, more or less, to Thomas Hun-char. This deed was prepared by defendant, Stahlman, at plaintiffs’ request from the Washburn survey, and he received $5.00 compensation for his services.
16. September 5th, 1945, plaintiffs sold a tract of land containing 2 acres, more or less, to Lawrence Tabin et ux. This deed was prepared by defendant, Stahlman, at plaintiffs’ request, from the Washburn survey, and he received $5.00 compensation for his services.
17. September 15th, 1945, plaintiffs sold a tract of land containing 1 acre, more or less to Frank Misas. This deed was prepared by defendant, Stahlman, at plaintiffs’ request from the Washburn survey, and he received $5.00 compensation for his services.
18. Title to some of the land purported to be conveyed in the deeds referred to in findings of fact 13, 14, 15,16, and 17 was then vested in the Beaver County Commissioners, and not as plaintiffs thought in plaintiffs, who were grantors in the deeds heretofore mentioned.
19. At the time Stahlman prepared the deeds heretofore mentioned, he was a duly elected, qualified and acting justice of the peace of the borough of Baden.
20. Stahlman was not an agent for plaintiffs in the sale of any land, he had no dealings with any purchasers and he acted for plaintiffs at their request, only in drawing the deeds and taking plaintiffs acknowledgment to the deeds. ........
22. In July, 1946, Chalupiak brought to Stahlman a petition to validate title to his land for the purpose of swearing to it. Stahlman read the description to Chalupiak, and showed Chalupiak on the borough map of Baden that the description and map indicated that Chalupiak did not own the land.
23. On two occasions, at Stahlman’s office, Stahlman told Chalupiak that he did not have title to the land, and Chalupiak replied that two lawyers- and one surveyor said he did, and he thought they knew more about it than Stahlman.
24. Stahlman did not deceive Chalupiak as to any fact relative to the title to the land... He told Chalupiak, on several occasions, that he was of the opinion that the land did not belong to Chalupiak.
25. Chalupiak acted throughout as agent for his wife, Katherine Chalupiak.
26. Stahlman acted throughout as agent for his sister, Helen S. Wright.
27. Before Stahlman purchased any of the land in question, he informed Chalupiak that the land in question was listed for sale by the Beaver County Commissioners.
28. August 28th, 1946, Stahlman purchased the Alciphran Pier tract of land as agent for Helen S. Wright, at public sale, after due advertisement.
29. On February 26th, 1947, Stahlman bought the Mrs. M. A. Machesney tract of land in his name, and the name of Helen S. Wright, from the Beaver County Commissioners, at public sale, after due advertisement.
30. On February 26th, 1947, Stahlman bought from the Beaver County Commissioners, at public sale, after due advertisement, the L. D. Machesney tract of land, in his name, and the name of Helen S. Wright.
32. Ghalupiah had notice before Stahlman purchased any land that the property would be sold by the Beaver County Commissioners. He had actual notice from Stahlman and he had constructive notice by the advertisement of the Commissioners sales.
33. Any information secured by Stahlman as to ownership of land in Baden, was not secured by him from Chalupiah. He had such information before Ghalupiah came to him to prepare deeds. He brought this information to the attention of Chalupiak on several occasions. Ghalupiah, relying on advice of his engineer and counsel, refused to heed the information given by Stahlman.”
The Court below in its opinion said: “The evidence amply supports the conclusion that when plaintiffs requested defendant to prepare the first deed, defendant refused. He assigned as a reason that he was of the opinion that plaintiffs did not own the land. He prepared the other deeds after plaintiffs told him that plaintiffs’ engineer and lawyer assured plaintiffs that plaintiffs’ title to the land was good. Several times thereafter defendant called plaintiffs’ attention to the fact that the title was questionable. Defendant drew deeds from a blue print and information submitted by plaintiffs. There is no evidence to support a conclusion that at any time did plaintiffs rely on any representation by defendant relative to ownership of, or title to the land. All the evidence is to the contrary. Plaintiffs did not seeh advice of any hind from defendant. On every occasion they refused to heed the warnings gratuitously offered by defendant.
“Plaintiffs cannot have an order for conveyance of the land in this case for another important reason.
In the light of the Court’s findings of fact and discussion which were clearly supported by the overwhelming evidence, it is clear as crystal that whatever knowledge defendant had with respect to the property was never obtained from the plaintiffs; that he gratuitously informed plaintiffs that he did not think they had a good title to the property; that he acted only as a conveyancer receiving the colossal compensation of $3.00 or $5.00 for each deed; that he informed plaintiffs of the Commissioners pending sale of the property before he purchased it; that the plaintiffs did not rely on defendant or seek his advice but relied upon the advice of their attorney and engineer instead of the defendant’s opinion; that the sale was a public sale, after due advertisement, of which the plaintiffs had actual as well as constructive notice; that the sale toas not under the control of the defendants nor were they instmcmental in bringing it about, nor did they have any connection whatsoever with it. In the light of these facts the Court below naturally and necessarily found that defendant occupied no confidential relationship to the plaintiffs.
This principle is reiterated in Kelley’s Estate, 297 Pa. 17, 21, 146 A. 260, and was recently recognized by this Court, speaking through Mr. Justice Linn, in Strickler’s Estate, 328 Pa. 145, 150, 195 A. 134.
While it is unnecessary, we shall refer to other statements in the majority opinion in order to further demonstrate its fallacy and errors.
The majority opinion pointed out that defendant Stahlman, in addition to his employment in a mill, was a Justice of the Peace and a Tax Collector and that he
The majority also say: “Defendant secured, during the course of his service to plaintiff, the knowledge that plaintiff was attempting to convey land which plaintiff did not own”. [Defendant and anyone else interested could have readily secured this information from the recorded deeds.] “It was this knowledge that defendant utilized against the interests of plaintiff. Defendant, on the basis of this knowledge, went to a commissioners’ sale and purchased the land which he knew or suspected that plaintiff mistakenly thought he had already validly conveyed to others.” |®The majority have no right to find or conclude, without any evidence whatsoever to substantiate it, that the defendant utilized against the plaintiffs this knowledge which he could readily have obtained from the public records, or that this induced him, to go to the Commissioners’ sale and buy in the property. ] “It is manifest that had plaintiff never dealt with defendant the latter would never have been led to purchase the land in question.” This is a ridiculous non sequiiurf and is unsupportable by any evidence.
Although the defendant, when he bought the property, notified plaintiffs’ grantees in writing that he owned the property and they shouldn’t build thereon, the majority accuses the defendant of a “Squeeze” and further said: “It could easily be that even though plaintiff or his grantee were present at the commissioners’ sale, that defendant could bid up the price to a point where plaintiff would be required to settle upon defendant’s
The majority also attempt to make this conveyancer the equivalent of a lawyer or trustee and, unsupported by any authority, apply to him the fidelity which a lawyer owes to a client, completely overlooking the indisputable fact that defendant Stahlman was not a lawyer or trustee, that he was engaged only to draw a deed and not even to search title, and that plaintiffs employed their own lawyer and engineer and relied exclusively on them and their advice.'Even if this defendant were a trustee or fiduciary, which he was not, he still had a lawful right under a dozen (above mentioned) decisions of this Court to purchase this land at a public sale over which he had no connection or control.
I would affirm the Decree of the Court below on the very able opinion of Judge Morgan H. Sohn.
Italics throughout, ours.
Reference
- Full Case Name
- Chalupiak, Appellant, v. Stahlman
- Cited By
- 16 cases
- Status
- Published