Foll's Appeal

91 Pa. 434 | Pa. | 1879

Mr. Justice Paxson

delivered the opinion of the court,

This case presents some extraordinary features. We have nothing like it in this state since equity powers were conferred upon the courts. It was a bill to compel specific performance of a contract for the sale and delivery of fifteen shares of the stock of The First National Bank of North East, under the following circumstances: The bank in question is situated at North East, Erie county, Pennsylvania, and has a capital of $50,000, divided into five hundred shares of $100 each. R. M. Greer, complainant below, and appellee, is a merchant in North East, and at the commencement of the year 1877, owned ten shares of the stock of the bank in question. His mother owned sixty-five shares and his brother owned forty. About that time, R. M. Greer conceived the idea of getting enough of the capital of the bank to control it, and to carry out this plan, made an arrangement with his uncle, E. C. Custard, and E. E. Chambers, an operator in oil, to raise sufficient money to buy a controlling interest. They succeeded in buying a considerable amount of the stock, mostly upon borrowed capital, but still lacked the full shares necessary for control. John W. Foil, the appellant, had the requisite number, and on March 7th 1877, Greer and Foil entered into the following contract: “I hereby agree to purchase fifteen shares of The First National Bank of North East, from John W. Foil. The price to be paid is to be $2110.55, and interest from July 20th, at ten per cent.; said stock to be delivered before the second Tuesday of January 1878.” This contract was in writing and signed by the parties. Before the time arrived for delivering the stock, Foil informed Greer that he would not deliver it. Foil then made a tender of the money specified in the contract. This bill was then filed and referred to a master, who made his report recommending a decree for specific performance. Exceptions were filed to the report by Foil, which, after a hearing, were dismissed by the court below, the master’s report was confirmed, and a decree entered commanding Foil to transfer to Greer the shares of stock referred to. From this decree Foil entered an appeal to this court.

The avowed object of the purchase of the stock and the filing of this bill was to get the control of the bank for Greer and his friends. This appears upon the face of the bill, and is the main ground upon which equitable relief is asked. While the primary object was to obtain the.control of the bank, there were, at the same time, secondary objects. As a part of the plan, the said R. M. Greer was to be made cashier, and Custard and Chambers, before mentioned, were to be directors.

The general rule is, that equity will not enforce specific execution of a contract relating to personal chattels: 3 Parsons on Contracts 364. This is so even in England, where the equity jurisdiction is much broader than in this state. The reason for the rule is, that for the breaoh of a contract of sale of personal chattels, there is an adequate remedy at law. A jury can be in no doubt as to the proper measure of damages. This is especially true of stocks and public securities which have a known market value. The disappointed purchaser can go into the market and purchase a corresponding number of shares of the same stock.

To this general rule, however, there are exceptions. An article of personal property may have certain qualities not common to other articles of like description, or may have an especial value by reason of its antiquity, family association, or the like. A number of instances are collected in McGowin v. Remington, 2 Jones 61. They are title deeds of an estate and other muniments of property; an antique silver altar-piece: Duke of Somerset v. Cookson, 3 P. Wms. 389; an ancient horn, the symbol of tenure by which an estate is held: Pusey v. Pusey, 1 Ves. 273; heir-looms, 3 Ves. & B. 18, and even a finely-carved cherry stone: Ambler 77.

I know of no instance in this state in which a court of equity has decreed specific performance of a sale of stock. McGowin v. Remington, supra, which was cited on behalf of the appellee, is not in point. The specific chattels in that case whose return was sought to be enforced, consisted of a surveyor’s maps, plans, and papers of like character. They manifestly came within the exceptions noted, and besides it was a clear case of trust. But we need not pursue this subject further, as the case in hand turns upon a different principle.

While the legal right of the complainant to buy up sufficient of the stock of this bank to control it in the interest of himself and friends may be conceded, it is by no means clear that a court of equity will lend its aid to help him. A national bank is a quasi public institution. While it is the property of its stockholders and its profits enure to their benefit, it was nevertheless intended by the law creating it that it should be for the public accommodation. It furnishes a place, supposed to be safe, in which the general public may deposit their moneys, and where they can obtain temporary loans upon giving the proper security. There are three classes of persons to be protected, the depositors, the noteholders, and the stockholders. We have no intimation that the bank, as at present organized, is not prudently and carefully managed. The stock, as now held, is scattered among a variety of people and held in greater or lesser amounts. It is difficult to see how the small stockholders, who have their modest earnings invested in it, the depositors who use it for the safe-keeping of their moneys, or the business public who look to it for accommodation in the way of loans, are to be benefited by the concentration of a majority of its stock in the hands of one man, or in such way that one man and his friends shall control it. Especially is this so when an attempt is made to control it by the use of borrowed capital. The temptation to use it for personal ends in such case are very strong. It is a fact to which we cannot close our eyes, that the financial wrecks of such institutions with which the pathway of the last few years is so thickly strewn, are the result, in a great measure, of personal management. This purchase has not even the merit of being an investment on the part of the plaintiff. When a man buys and pays for stock with his own money, it may be regarded as an investment. When he buys it upon credit, or pays for it .with borrowed money, it is a mere speculation.

Were we to affirm this decree, I see no reason why we may not be called upon to use the extraordinary powers of a court of equity to assist in miscellaneous stock-jobbing operations. A party who is attempting to make a “ corner” in stock or in any article of merchandise, who had made his contracts with that end in view, might, with equal propriety, call upon us to decree specific performance thereof. But the decree of a chancellor is the exercise of a sound discretion; it is of grace, not of right, and will never be made where the equity and justice of a case is not clear.

We are in no doubt as to our duty in the premises. We are of opinion that the end sought to be attained by this bill is against public policy, and for that reason we refuse our aid.

The decree is reversed and the bill dismissed at the cost of the appellee.