Norris v. Crowe

55 A. 1125, 206 Pa. 438, 1903 Pa. LEXIS 739

• Court: Supreme Court of Pennsylvania
• Decided: July 9, 1903
• Docket: Appeal, No. 277
• Status: Published

Opinion

Opinion by

Mr. Justice Dean,

In this appeal appellee has given us no aid by filing a paper-book and we are left to dispose of the issue by the presentation of appellant’s side of it and on the carefully considered opinion of the learned judge of the court below. The facts are about as follows: On December 7, 1866, the trustees of the Norris estate conveyed to Rev. James Crowe, minister of the Ninth Presbyterian congregation of Philadelphia, a lot of ground on the corner of Hancock street and Susquehanna avenue, reserving thereout a yearly six per cent ground rent of $340. After-wards, in 1893, the Reverend Crowe conveyed the property to his congregation which at that date had become incorporated. By proceedings in partition of the estate of Isaac Norris, Sr., in 1867, this particular ground rent became the property of Dr. Isaac Norris, this appellant. J. Parker Norris, his brother, was in 1891 his attorney in fact, and in that year a committee of the church corporation called upon and notified him, that unless the ground rent was reduced from six to five per cent the congregation would pay it off. Both parties assumed that the ground rent was redeemable and therefore could be paid, off at the option of the lot owner. It was agreed, that the reduction to five per cent should be made, but that the option should not be exercised for five years; thereupon, the following agreement in writing, signed and sealed, was executed:

“ That in consideration of the said Isaac Norris, M. D., not demanding more than five per cent interest on a certain annual ground rent reserved by deed dated December 7,1866, the said, the Norris Square United Presbyterian Church, doth hereby agree that they will not pay off the principal of the said ground rent until the expiration of five (5) years after the first day of July, 1891, and the said Isaac Norris, M. D., doth hereby promise and agree that he will not, at any time, ask, demand, or sue for more than five per cent interest on said ground rent so long as the said church continues to pay the same with reasonable punctuality.”

The case of Palairet v. Snyder, 106 Pa. 227, appeal from common pleas, No. 1, of Philadelphia, had been decided by this court in 1884. The reservation of ground rent in that deed was substantially the same in terms as in the one before us, and we held the ground rent was irredeemable ; although that case had been the law for seven years both parties were ignorant of it. The congregation thereafter continued to pay the ground rent at five per cent as stipulated in the agreement and Norris continued to accept the same without objection until January 28, 1901, when Norris discovered the decision in Palairet v. Snyder and concluded that his ground rent was irredeemable; he at once demanded from the congregation six per cent and on refusal to pay brought assumpsit in common pleas, No. 4, of Philadelphia. To this the congregation filed an affidavit of defense denying liability for more than five per cent and averring, the stipulation in the agreement, as limiting liability to that amount. While the record of the action at law stood in this condition, on January 10, 1902, Norris filed this bill, praying that the agreement be declared void and that it be delivered up for cancelation on the ground that it was entered into under a mistake as to the law by both parties, and further, specially praying that defendant be enjoined from setting it up as a defense in the action of assumpsit. The defendant demurred on the grounds that an action at law involving the same matter was then pending and that on the face of the bill plaintiff had no equity of which a court of equity would take jurisdiction. The court below sustained the demurrer and dismissed the bill, first, because plaintiff had an adequate remedy at law; and second, because the mistake of law was one which under the facts averred in the bill, equity would not relieve against.

We think that plaintiff had an adequate remedy at law. He had brought his action in assumpsit and defendant had filed affidavit disclosing fully its defense, based on the agreement. At the trial plaintiff would have offered his deed of 1886 to Reverend Crowe reserving his six per cent ground rent; defendant would then have put in evidence the agreement of June 13, 1891; plaintiff would then have replied with evidence of mutual mistake of the law by the parties; it would then have been for the court to interpret the agreement and declare its effect in view of the undisputed evidence and to have directed a verdict. Why would not this have been an adjudication of the very issue raised by this bill and demurrer ? It is suggested, that it would not have been an adequate or convenient remedy because suits could still have been brought in the future for each six per cent annual ground rent as it fell due. We do not think so; the judgment would have been res adjudicata as to whether the ground rent was five or six per cent. If plaintiff had won he could have brought suit for six per cent and defendant could have defended only on proof of payment of that rate; but if defendant had won and plaintiff had sued for six per cent, plaintiff would have lost his case; obviously one suit at law would have ended litigation. We think the remedy at law was both adequate and convenient and that the court below might properly have dismissed the bill on this ground alone.

But probably, because the same question would have had to be determined in the action at law, that is, the effect of the agreement made under a mutual mistake of law, the court saw fit to go further, and determine whether on the facts the plaintiff should in equity be relieved from the consequence of it. The maxim, “ Ignorantia legis neminem excusat ” undoubtedly applies where the ignorance is of a well known rule of law, or as it is sometimes stated, ignorance of a general rule of law; but where the ignorance is of the law is specially applicable to the determination of a private right and the ignorant party complains because he has been prejudiced by the contract, it does not follow that equity will in all cases afford relief. By simply filing a demurrer, of course, the defendant admits the material averments of the bill and the material averment is, that the agreement was prompted by a mutual ignorance of the law as applicable to reservations of ground rent in the terms incorporated in this deed; both parties acting in the belief that this ground rent was redeemable, whereas in law it was not. Will equity under these facts afford plaintiff relief from the consequences of his ignorance of the law? Under what circumstances and as to what contracts the maxim would be enforced seems to have been first fully discussed by this court in Good v. Herr, 7 W. & S. 253, in an elaborate opinion by Rogers, J. In that case a childless man died intestate possessed of a large estate in land, leaving a widow, two uncles and an aunt living, and children of two uncles who were dead. The widow accepted one of the purparts of the land at the valuation of $20,000 and entered into recognizance to pay to all persons entitled thereto, their respective shares. She paid to each of the brothers and the sister living one fifth and to the children of each deceased brother as representing their fathers per stirpes one fifth. All parties believed at the time that the payments were in accord with the law of descent; all were ignorant that the two uncles and aunt were entitled to the whole and the nephews and nieces to nothing. All on receiving the money executed releases to the widow. One of the surviving brothers having, after receiving the money and executing the release, died, his administrator discovered that instead of one fifth he had been entitled to one third and brought suit against the widow for the difference. When she set up the release, he sought to avoid it by showing mutual ignorance of the law of descent by all parties; each being of the belief that the children were entitled to the shares of their parents. There was no question but that at the time of the distribution all parties were ignorant of the law and that was the only fact on which the release could be treated as void. By sustaining it the surviving brothers and sister lost two fifths of the estate; by declaring it void the widow would have had to pay over again the two fifths paid to the nephews and nieces.

There was no serious hardship in the case; the estate remained in the family of the dead brother; his brothers and sister got a fraction less than the law allowed them; the nephews and nieces a fraction more. It was a case of ignorance of the law alone and this court declined to set aside the release. In the opinion, the court cites a number of authorities from the Supreme Court of the United States, as well as Story’s Equity Jurisprudence in support of the rule, that mere ignorance of the law itself is no ground for relief in equity and concludes thus i

“We grant that, where there is a mistake of a clear, well established and well known principle of law, whether common or statute law (for in this respect we can conceive no difference), equity will lay hold of slight circumstances to raise a presumption that there has been some undue influence, imposition, mental imbecility, surprise or confidence abused, but it is obvious that, in such cases, the mistake itself is not the foundation of relief, but the relief is had on entirely independent grounds, so as not to impinge the general rule. We are therefore of the opinion that in no case is ignorance or mistake of the law, with a full knowledge of the facts, per se, a ground for equitable relief.”

Justice Rogers admits there are rare exceptions to the rule and we concede that the trend of decisions in our state has been to multiply the exceptions as witness: Heacock v. Fly, 14 Pa. 540; Peters v. Florence, 38 Pa. 194; Gross v. Leber, 47 Pa. 520; Whelen’s Appeal, 70 Pa. 410; Goettel v. Sage, 117 Pa. 298; Wilson v. Ott, 173 Pa. 253, and perhaps others; but in each of the cases cited the relief granted was not based solely on the ground of ignorance of the law; but there were in addition circumstances of great hardship resulting from the ignorance, or, in addition to the mistake of law, facts pointing strongly towards fraud or undue influence, yet which would not have been so certainly established as to warrant setting aside the contract.

Notwithstanding the remarks of McCollum, C. J., in Wilson v. Ott, supra, the last case cited, tending to throw doubt on the continued existence of the rule in Good v. Herr, supra, yet it will be noticed he cites Good v. Herr and distinguishes it from the one before him. What he says in disparagement of the rule is based on an essay in the American Jurist, and was not necessary to a decision of the case before him and therefore to some extent is dicta. The case before him was a “ hard ” case in which if the contract had been enforced according to law the defendant would have been compelled to pay $4,000 for a title they did not get, a case of gross hardship clearly constituting it an exception to the rule; therefore no assault on the general rule was necessary. This is the Pennsylvania case on which appellant seems to most confidently rely. But nevertheless, we adhere to that rule as the law of this commonwealth, that is, “In no case is ignorance or mistake of the law with a full knowledge of the facts, per se a ground for equitable relief.”

If the evidence shows, that in addition there would be great hardship in enforcing the contract made in ignorance of the law, equity may afford relief. But between the border of great 'hardship and actual fraud there are many contracts made in ignorance of the law; yet which result in no inequitable consequences from the enforement of the general rule. In such cases the rule should be enforced. The principle of the inviolability of contracts made with a full knowledge of the facts, and where there has been no overreaching or serious injury, should not be disturbed for slight reasons. There are very few cases where the title of a grantee of land has failed that the failure is not the result of ignorance of law by the grantee or of his counsel; the ignorance may only be demonstrated in a subsequent judicial trial, yet the legal theory is, that the law as announced at the trial was always the law though its first promulgation may have been only at that particular trial.

But a case directly in point is decided by the Supreme Court of California reported in 20 Cal. 637, and in 81 Amer. Decisions, 137, Kenyon v. Welty. In this case a contract was entered into by both parties under the belief that the law had been established by a decision of the Supreme Court made some time before. Clearly, both parties entered into the contract under the view of the la-w as announced by the Supreme Court. Sometime after, the court overruled its decision in the first case, and an action was brought to set aside the agreement on the ground that it had been made because of a mutual mistake of law. The court refused to disturb the contract saying: “ Indeed the weight of authority in the United States is, that mistakes (of law), unless accompanied with special circumstances, such as misrepresentation, undue influence or misplaced confidence, constitute no ground for relief.”

In the case before us there was no new law announced relating to contracts, in Palairet v. Snyder, supra, of which plaintiff might easily have been ignorant. That case only announces a law old as English law, that is, that where the grantee of land by deed covenants to pay annually forever an annual rental of a certain sum of money, unless, within ten years lie pays the full purchase money for the land, and he fails to pay the purchase money within the ten years, the annual rental becomes perpetual. It only promulgates the old law that parties are bound by their contracts; it would have been new law if this court had decided they were not. This, however, was the law of which plaintiff was ignorant; by reason’ of his ignorance, in an agreement under seal, he made a reduction of one per cent in the annual rental because he believed if the reduction was not made defendants would pay the principal; the only reasonable inference is, because his investment at five per cent was better than he could get elsewhere. No misrepresentation as to the law was made to him by anybody; law books and lawyers were thick around him but he did not take the trouble to inquire; he was induced to enter into the bargain because of its profit to him. It is just as profitable now, for while the legal rate of interest is six per cent, the commercial rate is five or less. As he avers, the ignorance of the law was mutual; if plaintiff had not entered into the agreement, defendants, in equity and good conscience, could then and there have paid off and extinguished the ground rent; by their mistake that opportunity was lost; by his mistake he has lost nothing that he expected to make by the bargain. We can see no hardship in this contract which should move a chancellor to reach forth his hand and destroy it.

As to the question of want of consideration, the plaintiff suffers no hardship from his contract which will move equity to rescind it; the contract then is in full force; it met the approval of plaintiff when he signed it; he got the consideration he demanded. The seal imports a consideration; on its face the contract expresses one; therefore, as long as equity refuses to abrogate it, it must be taken to be what it purports’ to be, a good contract in law.

The decree of the court below is affirmed and the appeal is dismissed at costs of appellant.