Buchanan v. Brentwood Federal Savings & Loan Assoc.

Concurring and Dissenting Opinion by

Mr. Justice Pomeroy:

This case presents a procedural tangle which should be straightened out before the Court decides the difficult substantive questions as to whether a cause (or causes) of action has been stated.

The case is brought by 29 plaintiffs (13 sets of husbands and wives and three individuals) on behalf of themselves and others similarly situated against 31 lending institutions “and other unknown banking institutions and savings and loan associations doing business in Allegheny County, Pennsylvania”. Some, but not all, of the named defendants filed preliminary objections to *162the amended complaint and, also, to a second amended complaint by which a fourth count was added.

The preliminary objections included, inter alia, (1) a demurrer and (2) an assertion that the complaint failed to state a proper class action because (among other reasons) “the questions of law or fact involved are not common to all the plaintiffs or proposed members of the class”.

The court en banc below sustained the demurrers and dismissed the complaint. From that decree, ten separate appeals have been brought to this Court. Motions to quash have been filed, which the Court has denied. I must disagree.

Not all of the named plaintiffs are included among the appellants, and not all the named defendants are among the appellees. In each appeal, the appellants are different persons, and this is true also of the appellees, although one appellee is named as such in two appeals. While there is discernible a pattern in these appeals of grouping plaintiffs who are mortgage borrowers from a particular lending institution as appellants from the “orders” in favor of their respective lending institutions, this is not consistently the case.1 Whatever rationale may have lain behind the manner in which these appeals were taken, it seems clear that they do not comport with proper appellate practice. "Where more than one judgment or appealable order is entered below, we have held that the aggrieved parties may not file only a single appeal; they should appeal from each *163judgment or order which binds them. See Stewart v. Chernicky, 439 Pa. 43, 58 n. 15; Generad Electric Credit Corp. v. The Aetna Casualty and Surety Co., 437 Pa. 463, 469, 470, 263 A.2d 448 (1970). By the same token, it would seem that where, as here, a single order or decree has been entered dismissing a complaint because it does not state a cause of action, there should be but a single appeal.2 Without passing on the class action challenge, this case was treated by the court below as a class action for purposes of the demurrer, and for procedural purposes, the plaintiff class is to be treated as a single party.3

1 am unable to find authority for the appeal procedure here followed, i.e., groups of selected plaintiffs as appellants, adverse to groups of selected defendants as appellees; this is neither fish nor fowl nor good red herring. In the interest of orderly and intelligent appellate review, therefore, I would grant the motion to quash the appeals.4

*164Since tbe Court has not seen fit to quash, I feel it desirable to address briefly the merits of the appeals. One reason which the majority opinion gives for reversal is “because this Court cannot say with assurance that the trial court considered each mortgage and bond agreement individually when it concluded that appellants could not establish in any circumstance the existence of a trust relationship”. (Opinion of the Court, supra, p. 148; see also notes 12 and 13, and note 10, second paragraph.) The opinion then states that there are substantial differences in the language of the instruments (which the Court apparently considers as properly part of the record),5 and that “these variations may be crucial to the correct assessment of what relationship the parties contemplated”. (Opinion, p. 149.) In light of these statements, I cannot understand how the Court can nevertheless hold, in sweeping and *165all-inclusive fashion, that appellants “sufficiently alleged the creation of a trust”. (Opinion, p. 144.)

On the other hand, I cannot, looking only at the complaint, conclude that there is not enough alleged to make out a cause of action on the theory of a constructive trust. The plaintiffs have alleged the payment of so-called escrow funds to defendants, calculated in terms of amounts necessary to pay taxes, assessments and fire insurance premiums applicable to their respective real estate holdings; a commingling of these escrow payments with general funds of the defendants; the receipt by defendants of earnings on those funds; a failure to pay or account to plaintiffs for those earnings; and an appropriation by the defendants of the earnings to their own use, as a result of which they have been unjustly enriched. While the propriety or impropriety of this conduct, like the existence of express trusts, may be in large measure dependent on the terms of the agreements, oral or written, between the parties, the complaint as it stands states a cause of action.6

In Schott v. Westinghouse Electric Corp., 436 Pa. 279, 259 A.2d 443 (1969), where we held that the plaintiff had stated a cause of action in quasi-contract sufficiently well to get by a demurrer, we stated the familiar rule that preliminary objections should be sustained and a complaint dismissed only in cases which are clear *166and free from doubt. As we there put it, “[t]o sustain preliminary objections in the nature of a demurrer, it must appear with certainty that, upon the facts averred, the law will not permit recovery by the plaintiff. Where any doubt exists as to whether or not the preliminary objections should be sustained, that doubt should be resolved by refusing to sustain the objections [citations omitted]”. 436 Pa. at 291. In its present status, the case at bar presents, as I see it, serious doubt as to whether the demurrer should have been sustained. I accordingly concur in the reversal of the decree below and the remand for further proceedings.7

For example, none of the named plaintiffs is alleged to have any lending arrangements with defendant Union National Bank, yet that institution is named as appellee in the appeal of Kisslinger, et ux. and Stavrides, et ux. at No. 130. Three other named defendants are also designated as appellees in that appeal, as are “other unknown banking institutions doing business in Allegheny County, Pennsylvania”. One transaction — that between the Raphaels and Franklin Federal Savings & Loan Association — is not involved in any appeal.

This procedure was followed in Kern v. Duquesne Brewing Co., 396 Pa. 279, 152 A.2d 682 (1959), where the Court affirmed the sustaining of a demurrer in a purported class action in equity at 17 D. & C. 2d 299 (C.P., Allegheny County, 1958).

Had this action been brought under the permissive joinder provisions of the Eules of Civil Procedure, see Pa. E. C. P. 2229, the result would be different. In such a case, the plaintiffs should bring separate appeals from the respective decrees against them. Clark v. Clark, 411 Pa. 251, 252 n. 2, 191 A.2d 417 (1963); Pa. R. C. P. 2231(d).

While argument can be made, as appellees at Nos. 123 and 130 have done, that the complaint here must be viewed as one of permissive joinder, and that the single decree must be treated as multiple, thus requiring separate appeals, this argument seems forced at this stage of the proceeding. The court en banc’s use of the plural in its decree, vis., that “the several complaints are dismissed” (584a), cannot be given so much weight.

Were this to be done, the order granting the motion should, in my opinion, state that it is without prejudice to the filing of a proper appeal within 30 days of the date of the order.

The complaint does not “state specifically whether any claim ... set forth therein is based upon a writing”, as stipulated by Pa. R. C. P. 1019(h), a requirement of long standing in equity actions as well as in actions at law. Pa. R. C. P. 1501. Although it seems obvious that bonds and mortgages which plaintiffs have executed and delivered to some of the defendants are the basis of the claims, neither the writings nor the material parts thereof were attached to the complaint, this omission also being in violation of our rule. No objection was raised to these pleading irregularities by defendants. Instead, the preliminary objections attached copies of a number of the bonds and mortgages referred to in certain transactions, of which eighteen were listed in paragraph 5 of the amended complaint, but, as the opinion of the Court points out (see footnote 13, p. 148, supra), the documents relative to five listed transactions were not included, nor were the instruments made part of the preliminary objections. The plaintiffs did not file answers to the preliminary objections, and the record thus contains no express indication that the documents are accepted as true and complete copies. About the only thing that can be said with assurance is that the copies of bonds and mortgages as they are reproduced in the printed record before the Court are in large measure illegible. The ambiguity of the record as to the instruments involved contributes materially to the tangled status of the case as it comes to us.

As previously indicated, I think the complaint is deficient for non-compliance with our rules as to the pleading of agreements. I do not express any opinion as to whether, if the agreements were properly made part of the complaint, a cause of action based on breach ot a constructive trust would or would not be stated. As we noted in Schott v. Westinghouse Electric Corp., 436 Pa. 279, 290, 259 A.2d 443 (1969), the Court has previously “found the quasieontractual doctrine of unjust enrichment inapplicable when the relationship between the parties is founded on a written agreement or express contract [citations omitted]”. The view expressed in the main text is based on the allegations of the complaint as it now stands.

I also agree that, on remand, the trial court should at an early stage address itself to the class action aspects of this case, and concur in the observations contained in part IV of the Court’s opinion in this regard. I agree with Judge Silvestei of the Court of Common Pleas of Allegheny County, in the thorough discussion of class actions in Pennsylvania contained in his opinion in McMonagle v. Allstate Insurance Co., 122 P. L. J. 107 (1973), that “there should be a determination as early in the proceedings as may be practicable whether an action brought as a class action is to be so maintained”. 122 P. L. J. at 112. Indeed, from the vantage point of hindsight, it would have been helpful in the case at bar had the trial court addressed the class action problems raised by the preliminary objections prior to consideration of the demurrer.