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SCIENTIFIC LIVING v. HOHENSEE (10/09/70)

decided: October 9, 1970.

SCIENTIFIC LIVING, INC.
v.
HOHENSEE, APPELLANT



Appeals from decrees and orders of the Court of Common Pleas of Lackawanna County, in equity, No. 16, Sept. T., 1965, and Orphans' Court Division, Nos. 1086 and 1214 of 1967, in cases of Scientific Living, Inc. v. Ervin Hohensee, Estate of Adolph Hohensee, and Estate of Euphemia Hohensee.

COUNSEL

Ervin Hohensee, appellant, in propria persona.

Thelma Tompkins, appellant, in propria persona.

William T. Malone, for intervening appellee.

Myron A. Pinkus, for appellee, guardian of estate of minor.

Robert P. Browning, with him Oliver, Price & Rhodes, for intervening appellee.

Bell, C. J., Jones, Cohen, Eagen, O'Brien, Roberts and Pomeroy, JJ. Opinion by Mr. Justice Jones.

Author: Jones

[ 440 Pa. Page 283]

Confronting us are seven appeals involving both the estate of Adolph Hohensee -- who died October 4, 1967 -- and the assets of a Pennsylvania corporation called Scientific Living, Inc. (Scientific), which corporation was dominated by Adolph Hohensee, its largest stockholder.

One appeal (No. 242 January Term, 1969) arises from litigation in a court of common pleas, sitting in equity, involving the ownership of an extensive tract of land in Lackawanna County, which land constitutes the most valuable asset of Adolph Hohensee's estate. The other six appeals (Nos. 37, 38, 40, 134, 199 and 200 January Term, 1970) stem from several phases of litigation in the orphans' court division of a court

[ 440 Pa. Page 284]

    of common pleas in connection with the estate of Adolph Hohensee. All the appeals, in essence, are concerned with the ownership and the control of the land located in Lackawanna County, allegedly, having a value of approximately one million dollars.

Appeal No. 242 January Term, 1969

This appeal lies from a definitive decree entered by the Court of Common Pleas of Lackawanna County in an equity action instituted by Scientific Living, Inc. (Scientific) against Ervin Hohensee, brother of Adolph Hohensee (appellant).*fn1

In this action, Scientific sought to prove that appellant had recorded in Lackawanna County two deeds which purported to convey the large tract of land in that county owned by Scientific to appellant, that Scientific had never authorized the transfer of its title to that land, had not received any consideration therefor and that there had never been a valid delivery of these deeds by Scientific to appellant. Scientific requested the court to cancel, as fraudulent and void, these deeds and to enjoin appellant from conveying or in any manner encumbering the land described in these deeds.

After institution of the action, Scientific entered a default decree against appellant for his failure to answer its complaint; from the entry of that decree an appeal was taken to this Court. We held that the court below had erred in sustaining the entry of the default decree without first disposing of appellant's motion to vacate and dismiss the proceedings, a motion which had been filed prior to the entry of the decree. In reversing, we vacated the default decree and remanded the matter for further proceedings in the court below. See:

[ 440 Pa. Page 285]

    father's home where the deeds were then kept, took the two deeds which purported to convey the land in question from Scientific to appellant and, on February 25, 1963, appellant, accompanied by Scientific's secretary, recorded the deeds in Lackawanna County.

After our remand on the previous appeal, this matter came on for a hearing before the then President Judge T. Linus Hoban*fn4 and testimony was taken.*fn5

On October 16, 1968, the chancellor entered a decree nisi declaring the deeds fraudulent and void, authorizing the recorder of deeds to so indicate on the records, enjoining appellant from conveying or encumbering in any manner the land and from asserting any title adverse to that of Scientific. Appellant filed seventy-six (76) exceptions to the decree nisi which were dismissed by the court en banc and a final decree was entered on December 27, 1968. The instant appeal was then filed.

In passing upon this appeal, we bear in mind: (1) the findings of facts of a chancellor, approved by a court en banc, are controlling on appeal and will not be disturbed at the appellate level, in the absence of manifest error and where the record supports such findings (Craft Reupholstering Co. v. Rosenberg, 420 Pa. 43, 216 A.2d 49 (1966); Drummond v. Drummond, 414 Pa. 548, 200 A.2d 887 (1964)) and (2) that such rule is particularly applicable to findings of facts which are predicated upon the credibility of witnesses, whom the chancellor has had the opportunity to hear and observe, and upon the weight to be given to their testimony.

[ 440 Pa. Page 287]

Inter alia, the court below found on the basis of the testimony which it heard:

"16. No corporate authority was ever granted by resolution or otherwise for the purported transfer of the major asset of the corporation to Ervin Hohensee.

"17. No consideration was ever paid by Ervin Hohensee for the purported transfer to him.

"18. Eugene Basalyga testified that he never attested or acknowledged the deeds on the dates noted thereon, but that instead he affixed his signature on December 17, 1957, while he was in the Lackawanna County Jail when he was presented by Ervin Hohensee with a 'mass' of papers for signature which he, Basalyga, understood to be papers to enable him to perfect proceedings in Habeas Corpus to secure his release.

"19. The purported transfer of the lands of Scientific Living, Inc. to Ervin Hohensee was not made in the usual and regular course of the business of Scientific Living, Inc., was not made for the purpose of relocating the business of the corporation, and was not made in connection with dissolution or liquidation."

The court below concluded that, in the absence of a showing of corporate authority for transfer of the property, of proof of payment of any consideration or of delivery of the deeds and in view of the fact that the execution of the deeds was in violation of the Business Corporation Law (Act of May 5, 1933, P. L. 364, art. III, § 311, as amended, 15 P.S. § 1311), the transaction was void and the court directed a reconveyance of the land.

We have carefully studied the instant record and we are convinced that the findings of the chancellor are sufficiently supported by the ...


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