First Federal Savings & Loan Ass'n v. Swift

*216Dissenting Opinion by

Mr. Justice Pomeroy:

I must dissent from the holding of the majority that a court of equity is powerless to rectify the manifest unfairness of allowing to stand this $5 tax sale of a property worth between $5,000 and $6,000. As Mr. Justice Eagen has correctly stated in his concurring opinion, supra (with which I agree save for the last, and I believe mistaken, paragraph), gross inadequacy of price has long been recognized as a sufficient basis, in itself, for setting aside a sheriff’s sale; the fact that the sale was accomplished in conformity with the procedures of the Real Estate Tax Sale Law1 does not insulate it from timely attack where no competing equities are involved, and the parties can be restored to their original positions. This is such a case.

The opinion of the Court denies relief on the basis of deference to the maxim that “equity follows the law” where, as here, a comprehensive statute prescribes the procedures for conducting a tax sale. But the maxim invoked is narrow indeed. As the eminent authority on equity jurisprudence relied on in the Court’s opinion states, “[t]he maxim is, in truth, operative only within a very narrow range; to raise it to the position of a general principle would be a palpable error. Throughout the great mass of its jurisprudence, equity, instead of following the law, either ignores or openly disregards and opposes the law.” 2 J. Pomeroy, Equity Jurisprudence 194, §427 (5th ed. Symons, 1941).2 Had *217the chancellor in this case merely been defining the rights of the parties under the Real Estate Tax Sale Law, he would perforce be confined to the provisions of that statute. But it is equally clear that a chancellor is free to provide traditional equitable remedies with respect to matters not covered by a statute. See 2 J. Pomeroy, op. cit. supra, §426a at 193. Here the statute treats of challenges to the regularity and legality of the actions of the Tax Claim Bureau (72 P.S. §5860.-607g), but those matters are not in dispute. What is in dispute, as mentioned at the outset, is the validity of the sale in light of the gross disparity between purchase price and value. With that matter the statute does not purport to deal in any way. I, thus, cannot agree that the Real Estate Tax Sale Law operates to oust equity of jurisdiction which traditionally has been within its cognizance. See Capozzi v. Antonoplos, 414 Pa. 565, 570, 201 A.2d 420 (1964); Peoples-Pittsburgh Trust Co. v. Blickle, 330 Pa. 398, 399-400, 199 A. 213 (1938), and cases cited; Delaware County National Bank v. Miller, 303 Pa. 1, 6, 154 A. 19 (1931); Warren Pearl Works v. Rappaport, 303 Pa. 235, 238, 154 A. 587 (1931).

The chancellor in his opinion held that “[e]quity certainly has the power to grant relief in the situation facing us here. In good conscience we could not stand by and see the plaintiff [appellee] suffer a substantial loss where no one is to be harmed by setting aside the tax sale and directing a new sale to be held.” As the cases above cited make clear, the relief granted by the chancellor was an exercise of Ms discretion as such. *218In Delaware County National Bank v. Miller, supra, we said: “It has often been said that this will not be done for a mere inadequacy of price, without more; but no case goes so far as to say that a chancellor must confirm a sale where the inadequacy is so great as to shock his conscience, as would be the case here. After all, the ultimate test always is, whether or not the action of the court in setting aside the sale was a gross abuse of discretion (Stroupe v. Raymond, 183 Pa. 279, 281; Chase v. Fisher, 239 Pa. 545, 548; Lefever v. Kline, 294 Pa. 22), and he would be a strange student of the law who could conclude that a chancellor grossly abused his discretion by refusing to do that which would have shocked his conscience.” 303 Pa. at 6. The Court reiterated this holding in Warren Pearl Works v. Rappaport, supra, as exactly fitting the appeal in that case. In my view, it equally fits the present appeal.3

My brother Eagen, while recognizing the inherent power of equity to set aside a judicial sale because of gross inadequacy of price, concludes that relief in equity is nevertheless unavailable here for the reason that the sale to appellant came about because of a mistake that was not mutual, but unilateral.

With respect, I think the emphasis on mutual mistake is misplaced and not supported by the cases cited in the concurring opinion.

It is true that, in the law of contracts, a unilateral mistake will generally not render a contract voidable, but the case at bar is not a contract case. Here the appellee failed to appear and bid at the sale because of misinformation received from an employee of the Tax Claim Bureau that the property was not listed for sale on the day in question. In Rappaport, supra, *219cited by Mr. Justice Eagen, “[t]he mortgagees did not bid at the sale, because they were informed by counsel for the execution creditor [who was not the purchaser at the sale] that their mortgages would not be discharged”. 303 Pa. at 237. In First National Bank of Sunbury v. Rockefeller, 333 Pa. 553, 5 A.2d 205 (1939), also cited in the concurring opinion, certain mortgages were erroneously satisfied “as the result of a mistake on the part of plaintiff with respect to the legal effect of the sale made by the executrix”. 333 Pa. at 556. The Court held that “a refusal to permit the correction of the mistake so made would grievously penalize and cause undeserved injury to the plaintiff for its careless but innocent error, and at the same time would result in unjust enrichment of the defendants at plaintiff’s expense”. Ibid.4 The mistake in Rockefeller was one of law, not of fact. While recognizing that “literal adherence to the rule that a court of equity will not relieve against a mistake of law” might prevent recovery, the Court felt that an exception was warranted where to grant the relief sought would merely place the parties in the positions held by them beforehand: “The injustice and hardship which will be suffered by plaintiff afford grounds for granting equitable relief, upon the fundamental principle that no one shall be allowed to enrich himself unjustly at the expense of another by reason of an innocent mistake of law.” 333 Pa. at 560. This was the rationale of the chancellor in the case at bar with respect to the innocent mistake of fact made by the appellee. The Court disserves the ancient purpose and function of equity and ignores the precedents which we ourselves have established when it holds that the chancellor erred.

Mr. Justice O’Brien joins in this dissenting opinion.

Act of July 7, 1947, P. L. 1368, §101, as amended, 72 P.S. §§5860.101 et seq., particularly §601 and following.

Pomeeoy outlines three main areas where the maxim is generally operative: First, “in the sense of obeying [the law], conforming to its general rules and policy, whether contained in the common or in the statute law”, id., §425 at 188; second, “in the sense of applying to equitable estates and interests some of the same rules by which at common law legal estates and interests of a similar kind are governed”, id., §426 at 191; third, with regard *217to limitations of actions and procedure for enforcement of decrees, id., §426a at 193. Bauer v. P. A. Cutri Co. of Bradford, Inc., 434 Pa. 305, 310, 253 A.26 252 (1969), cited in the Court’s opinion, is an example of the last type of case. Scott v. Waynesburg Brewing Co., 256 Pa. 158, 100 A. 591 (1917), also cited in the majority opinion, is an example of the second category.

The relief here allowed by tbe lower court was, in my view, also in accord with the general principles set forth in the Restatement of Restitution, Chapter 6. See especially §123.

Rockefeller was followed in Norard Hosiery Mills, Inc. v. Orinoka Mills, 416 Pa. 454, 206 A.2d 56 (1965).