TURNWAY CORPORATION, a Pennsylvania Corporation v. Joseph SOFFER and Violet Soffer, his wife, Appellants.
Supreme Court of Pennsylvania.
April 25, 1975
Reargument Denied June 18, 1975
336 A.2d 871
Argued Oct. 9, 1974.
John Daley, Brennan & Brennan, Pittsburgh, for appellee.
Before JONES, C. J., and EAGEN, O‘BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
OPINION OF THE COURT
JONES, Chief Justice.
Appellee, Turnway Corporation, brought this action in equity first to enjoin appellants from interfering with
Turnway is a Pennsylvania corporation organized in 1952. At all times material hereto, James A. Hаll was President and Director of the corporation, James H. Brennan was Secretary and Director of the corporation, and T. Robert Brennan was Treasurer, Assistant Secretary and Director. In 1951 James Brennan held record title to a six-acre tract of land on the southerly side of William Penn Highway in Wilkins Township, as trustee for George Beech and Mary Beech, his wife. One of Turnway Corporation‘s first acts in 1952 was to enter into a lease with James Brennan for the six acres of land for a term of fifty years, at a rental of $250.00 per month.
Prior to 1961, Joseph and Violet Soffer, appellants in this case, and Benjamin and Freda Thorpe had acquired a substantial amount of property immediately adjoining this six-acre tract. On this property, the Soffers and Thorpes constructed a complex of office and apartment buildings known as “Penn Center.”
Negotiations between the parties nevertheless continued, and a second agreement was reached. Undеr an agreement executed on September 17, 1962, Violet Soffer and Freda Thorpe agreed to purchase from James Brennan the same 1.274 acres which were to have been leased to the Soffers-Thorpes under the ineffective ninety-nine year lease. This 1962 agreement provided that Turnway got full title to the remainder of the six-acre tract, without any express mention of a right-of-way over the 1.274 acres. Turnway Corporation аs such, did not sign this second agreement but the agreement was negotiated and signed by the same individual, James Brennan, who negotiated the undelivered ninety-nine year lease. Settlement took place on January 15, 1963.
Some time late in 1962 and during 1963 the Soffers and Thorpes directed construction of sanitary and storm sewer lines, with manholes and inlets, serving the Penn Center complex through the 1.274 acres previously referred to and, in addition, through 250 feet of the property known as Turnway property. Some time in August of 1970 Turnway undertook to commercially develop the westerly portion of its property to which it had received
In July of 1964 the Thorpes conveyed all their interest in the property known as the Penn Center complex, together with the 1.274 acres of land, to the appellants herein Joseph Soffer and Violet Soffer, his wife.
Commencing in 1965, T. Robert Brennan wrote a series of letters to Joseph Soffer and his attorney, wherein he demanded that appellants build the allegedly agreed-upon right-of-way to join the Penn Center complex with the Turnway property and that if the Soffers refused, they reconvey the 1.274 acres to Turnway. These demands were predicated upon the Turnway officers’ mistaken impression that the ninety-nine year lease was in effect and/or that the September 1962 agreement to convey had retained the right-of-way аs part of the consideration. One letter, dated October 26, 1970, in addition to asking for the right-of-way, adverted to the fact that Turnway had discovered that Soffers’ sewers extended onto Turnway‘s property. The letters made no reference whatsoever to the existence of a fifty-year lease.
Appellee‘s complaint originally sought to require appellants to reconvey the 1.274 acres of land because appеllants had not furnished the right-of-way. The Soffers answered that they had purchased this 1.274 acres
Midway through the trial appellee sought permission to amend its complaint by dropping the request for reconveyance of the 1.274 acres and, insteаd, asserted that it had a leasehold interest in those same acres under the terms of the fifty-year lease. This amendment was not offered until after the trial had begun and after the death of James Brennan, Secretary and Director of Turnway, who had conducted most of the negotiations with the Soffers. Turnway‘s original complaint had specifically averred that the fifty-year lease, which became the basis of appellee‘s amended сomplaint, had been canceled. This admission was retracted in the amended complaint.
I.
Initially, we must dispose of appellants’ contention that it was error for the chancellor to allow appellee to amend its complaint midway through trial. At the time the amendment was offered, appellants’ counsel strenuously objected to this amendment on the grounds that it changed the entire theory of the case and came as a complete surprise. The chancellor, after allowing the amendment, granted the defense a continuance from January 5, 1973, until June 27, 1973. Appellants filed no exceptions relating to the amendment of pleadings. As a general rule, an exception to an equity adjudication is necessary to preserve an objection for appeal. Rankin v. Rogers, 305 Pa. 468, 157 A. 908 (1932).
II.
Appellants also felt that appellee should be precluded from asserting the validity of the fifty-year lease after Turnway had failed to assert this leasehold interest for ten years. As to the trespass count, appellants maintain in this appeal for the first time that it was prejudicial to them to allow the appellee to seek remedies for the installation of the sewer systems because, as appellants claim, appеllee knew of the existence of the sewers on its property from the time of the installation.
Laches, an affirmative defense, was not raised in the pleadings. It was advanced in the court below when the appellee sought to amend its complaint. This amendment was not offered until after the death of James Brennan, who had been the affiant on the original complaint and who had conducted most of the relevant negotiations between appellee and appellants. But laches was not asserted in the appellants’ exceptions to the adjudication. Although we might have overlooked the failure to plead laches in this case because at least one basis for the defense grew out of the mid-trial amendment of the complaint, nevertheless we cannot excuse the failure of the appellants to assert the defense in their exceptions to the adjudication. The defense of laches has also been waived.
III.
As to Count I—the leasehold interest of appellee in the 1.274 acres of land—appellants assert that the chancellor
Agency by estoppel is defined by Section 8B of the Restatement (Second) of Agency2 and the doctrine has been embraced by this Court in Reifsnyder v. Dougherty, 301 Pa. 328, 152 A. 98 (1930). Reifsnyder emphasized two basic elements of agency by estoppel: (1) there must be negligence on the part of the principal in failing to correct the belief of the third party concerning the agent; and (2) there must be justifiable reliance by the third party. Neither is present here. Agency by estoppel is generally deemed to be closely related to apparent authority. 2A C.J.S. Agency § 157 (1972). Thus, alternatively stated, a principal who clothes his agent with apparent authority is estopped to deny such authority. Robertson Coal & Coke Co. v. Rothey, 106 Pa.Super. 463, 162 A. 332 (1932); Fay v. Deady, 82 Pa.Super. 187 (1923). Thus, what we have said about apparent authority is equally apposite to agency by estoppel:
“An agent cannot, simply by his own words, invest himself with apparent authority. Such authority emanates from the action of the principal and not the agent.”
Jennings v. Pittsburgh Mercantile Co., 414 Pa. 641, 645, 202 A.2d 51, 54 (1964). Thus, thеre must be some carelessness or negligence on the part of Turnway in order to hold it bound to the 1962 conveyance as a principal.
The undelivered ninety-nine year lease and the 1962 agreement of sale were reached as a result of continuous negotiations between James Brennan and the Soffer-Thorpe interests. In September of 1961, when the negotiations for the ninety-nine year lease started, the Turnway Corporatiоn considered and agreed, via its Board of Directors, to have Turnway join in the ninety-nine year lease. James Brennan was the express agent of the corporation in this transaction. The ninety-nine year lease was specifically signed “Turnway Corp. by [signature] James A. Hall, President.”
There is no evidence that James H. Brennan ever represented himself as an agent of the appellee-corporation during the negotiations for thе 1962 conveyance. Consequently, appellee cannot be faulted for failing to disavow the agency. Brennan‘s “agency” was admitted by the appellants to have been only a “presumption” on their part. And certainly there was no evidence that appellee was aware of appellants’ presumption. Even if the appellants were somehow found to have justifiably relied upon their own presumption, there was no negligence or carelessness by appellee.
But, further, any presumption or reliance by the appellants was unjustified. In the absence of any representations of agency by Brennan or Turnway, the only
“[I]n order for a reasonable inference of the existence of apparent authority to be drawn from prior dealings, these dealings must have (1) a measure of similarity to the act for which the principal is sought to be bound, and, granting this similarity, (2) a degree of repetitiveness.
* * * * * * * *
Finally, the extraordinary nature of this transaction placed [appellants] on notice to inquire as to [Brennan‘s] actual authority, particularly since [the Soffers and Thorpes] were an experienced real estate . . . team.”
414 Pa. at 645, 647, 202 A.2d at 54-55. Given the extraordinary nature of the transaction, the fact that the Soffers were well aware of the existence of a fifty-year lease during negotiation of the undelivered ninety-nine year lease coupled with the absence of any reference to the lease in the agreement to convey, the fact that the Soffers and Thorpes were experienced real estate developers, and the absence of any oral or written indication of Turnway‘s joinder as a principal in the 1962 agreement, the Soffers’ presumption of Brennan‘s agency was not justifiable.
IV.
Appellants also state as to Count I that the chancellor erred by finding that the appellee had not abandoned its interest under the terms of the fifty-year lease. An abandonment of the premises by the tenant is a relinquishment which, as a matter of law, justifies immediate repossession by the landlord. Girard Trust Co. v. Tremblay Motor Co., 291 Pa. 507, 140 A. 506 (1928).
However, appellants point out that appellee did nothing with the land for over tеn years. The acreage involved was and still is vacant land. Moreover, neither rent nor any increase in taxes has been paid by appellee to appellants since appellants took title to the land in 1963. Nevertheless, whether there was an intention to abandon is a question of fact which the chancellor answered in the negative. In equitable actions, the findings of the chancellor approved by the court en bаnc are equivalent to a jury verdict, and, where supported by evidence, though in dispute, they are controlling on appeal. Onorato v. Wissahickon Park, Inc., 430 Pa. 416, 244 A.2d 22 (1968); Chambers v. Chambers, 406 Pa. 50, 176 A.2d 673 (1962). There is adequate evidence to sustain the chancellor‘s finding of fact in this regard.
V.
Finally, as to Count II—the trespass action—appellants argue that the sewage facilities were constructed with the knowledge and consent of the appellee‘s agent, James H. Brennan, and that, therefore, appellants had a license to place the sewer system on appellee‘s property. Appellants claim that they were expressly authorized to put sewers on appellee‘s land by the terms of
“It is agreed that immediately upon the execution of this agreement by all parties, the parties of the second part [the Soffers and the Thorpes] shall have the right to enter upon the land for the purpose of extending an existing storm sewer and for the purpose of placing fill thereon. . . .” (Emphasis added)
This argument is initially undermined by our earlier holding here that the chancellor was correct in finding that James H. Brennan was not an agent for Turnway during the negotiations and execution of the conveyance agreement. Furthermore, it would be a strained and unnatural interpretation of the tеrm “the land” in Section 9, above, if we held that term to refer not only to the 1.274 acres conveyed to appellants but also to the remainder of the six-acre tract which was conveyed to Turnway. Reading the agreement in its entirety, we can only interpret “the land” to mean the 1.274 acres which were soon to be conveyed to the appellants. There was no express license to place the sewers on appellеe‘s land.
Appellants also ask us to find that an implied license existed on the basis of equitable estoppel. “When the owner of land, with full knowledge of the facts, tacitly permits another repeatedly to do acts upon the land, a license may be implied from his failure to object.” Leininger v. Goodman, 277 Pa. 75, 77-78, 120 A. 772, 773 (1923); Accord, Bieber v. Zellner, 421 Pa. 444, 220 A.2d 17 (1966). Cf. Restatement of Property § 516 com. c. The implied license theory must fail, however, because there is sufficient evidence to show that the apрellants placed no reliance on the silence of the appellee as the sewage systems were being installed. Indeed, none of the parties were aware that the sewers were on appellee‘s land.
It is conceded that the sewer installation project was staked out with flags for months, and the
“The most significant testimony bearing on this Count of the complaint was offered by the defendant, Joseph Soffer. In his deposition, he testified that he was not aware that the sewer lines, manholes and inlets were constructed on the Turnway property and did not discover this until 1970 and knew of no basis on which the facilities were constructed on Turnway property. If he did not know that the construction was on Turnway property, how can it be said that Turnway Corporation knew or consented to said construction.”
The chancellor‘s conclusion as to Turnway‘s knowledge is immaterial since a permissible conclusion which can be drawn from Soffer‘s deposition is that there was no reliance by the Soffers and Thorpes upon the silence of the appellee. Since appellants had no knowledge that their sewer systems were intruding upon appellee‘s land, and since the deposition of appellant, Joseph Soffer, indicated that he knew of no basis upon which the intrusion was justified, we will sustain the finding of the chancellоr that there was no implied license by equitable estoppel. It is essential that persons claiming equitable estoppel have relied upon the representation or conduct of the person sought to be estopped. Stratford Arms, Inc. v. Zoning Board of Adjustment, 429 Pa. 132, 239 A.2d 325 (1968); Gianni v. Union Bank & Trust Co., 311 Pa. 121, 166 A. 553 (1933); 14 P.L.E. Estoppel § 23. A correct result will be sustained if it can be sustained for any reason whatsoever. See, e. g., International Union of Oper-ating Engineers v. Linesville Construction Co., 457 Pa. 220, 322 A.2d 353 (1974); Sherwood v. Elgart, 383 Pa. 110, 117 A.2d 899 (1955). Since no license by estoppel could exist, appellee was entitled to remedies for the trespass.
Decree affirmed. Costs on appellants.
NIX, J., concurs in the result.
ROBERTS, J., filed a dissenting opinion.
ROBERTS, Justice (dissenting).
On this record appellee has failed to establish its equitable entitlement to the relief granted.
The adjudication granting equitable and compensatory relief is the result, in my view, of a series of procedural and substantive errors involving basic doctrines of the law of contract, property and landlord-tenant as well as misapplication of equitable principles.
I dissent and would reverse and grant a new trial.