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BERGER v. PITTSBURGH AUTO EQUIPMENT COMPANY. (11/27/56)

November 27, 1956

BERGER, APPELLANT
v.
PITTSBURGH AUTO EQUIPMENT COMPANY.



Appeal, No. 141, March T., 1956, from order of Court of Common Pleas of Allegheny County, Jan. T., 1955, No. DSB 1782, in case of David Berger v. Pittsburgh Auto Equipment Company. Order affirmed; reargument refused December 21, 1956.

COUNSEL

Leonard M. Mendelson, with him Mortimer B. Lesher, for appellant.

John K. Tabor, with him Stuart N. Hutchison, Jr., Aims C. Coney, Jr., and Kirkpatrick, Pomeroy, Lcokhart & Johnson, for appellee.

Before Stern, C.j., Jones, Bell, Chidsey, Musmanno and Arnold, JJ.

Author: Stern

[ 387 Pa. Page 62]

OPINION BY MR. CHIEF JUSTICE HORACE STERN

The principle that controls the present stage of this controversy is that a proceeding to open a judgment is

[ 387 Pa. Page 63]

    addressed to the sound discretion of the court, and unless it clearly abuses that discretion its action will not be distrubed on appeal: Deviney v. Lynch, 372 Pa. 570, 94 A.2d 578.

Plaintiff, David Berger, and defendant, Pittsburgh Auto Equipment Company, entered into a written agreement whereby plaintiff leased to defendant for storage purposes a portion of the second floor of a certain property on Centre Avenue, Pittsburgh, for a term of two years commencing December 1, 1951, the tenant to have an option to renew the term for an additional two years. Defendant exercised this option and the lease was accordingly extended for two more years ending November 30, 1955. However, in Cotober, 1954, defendant vacated the premises, whereupon plaintiff, acting under a power of attorney contained in the lease, entered a judgment by confession against defendant for the balance of the rent for the remainder of the term, together with attorney's commission, in the total sum of $3,958.50.

Defendant's petition to have the judgment opened alleged that, as plaintiff was aware, it was engaged in the sale of automobile parts, supplies and equipment, which involved the storage of weights of 300 pounds and more per square foot of flooring; that plaintiff had represented to defendant's agent prior to the execution of the lease that the floor of the demised premises, having been repaired and strengthened, was sufficiently strong to withstand the weight of the merchandise that defendant would normally store thereon; that defendant executed the lease in reliance on this material representation; that subsequently it was found that the floor was incapable of withstanding even the minimum weight of 125 pounds per square foot ordinarily required by the Building Code of the City of Pittsburgh

[ 387 Pa. Page 64]

    to make a building eligible for storage purposes. It was further alleged that defendant filed an application for a certificate of occupancy for such purposes, the application was refused unless certain extensive repairs and alterations were made, and when plaintiff refused to comply with this requirement defendant vacated the premises.

Defendant having produced witnesses in support of these averments and plaintiff in contradiction thereof, the court held that "In our opinion the only way to discover what the true facts are is to have a jury determine them."

Plaintiff's principal contention is that, since all preliminary negotiations and verbal agreements are merged in and superseded by a subsequent written contract, the lease constituted the entire agreement between the parties, and, in the absence of an averment of fraud, accident or mistake, its terms could not be added to nor subtracted from the parol evidence. This is a total misconception of what is involved in defendant's petition to open the judgment. What the petition alleges is that plaintiff made, not a contractual promise or agreement which should have been contained in the written lease and therefore could not be added to it by oral testimony, but a statement of an existing fact as to the strength of the floor for storage purposes; indeed plaintiff's witness, who negotiated the lease on his behalf, stated that he knew that the floor would sustain a weight of only 120 to 125 pounds per square foot, although he denied the making of the statement attributed to him by defendant. A misrepresentation of a material fact, even though innocently made, if relied upon the other party as intended that it should be, confers upon the latter the right to rescind the contract when the falsity of the representation

[ 387 Pa. Page 65]

    is discovered: LaCourse v. Kiesel, 366 Pa. 385, 390, 77 A.2d 877, 880. The purpose of the evidence here presented by defendant was not to alter or vary the terms of the written instrument, but to sescind it in its entirety because of the alleged factual misrepresentation which induced defendant to enter into it.

Apart from this general contention, plaintiff urges two reasons why the judgment should not have been opened. The one is based upon the fact that, contemporaneously with the execution of the lease agreement, the parties signed a collateral agreement, one of the provisions of which was that "The Tenant has inspected the premises and accepts the property in its present condition." Plaintiff argues that even, therefore, if the alleged misrepresentation had been made as to the strength of the flooring, it was superseded and nullified by this admission on the part of the tenant. This undoubtedly would be a valid argument as to any condition of the property reasonably ascertainable, but only as to such conditions can it be held that the tenant was bound by this provision. Thus, in Pennsylvania Turnpike Commission v. Smith, 350 Pa. 355, 39 A.2d 139, where a contract with the Turnpike Commission purported to contain information as to the subsurface conditions and the nature and approximate quantities of the material to be excavated, but stated that each bidder must acquaint himself with conditions affecting the work and that the contractor should not plead misunderstanding or deception because of such estimate of quantities or of the character of the work described in the contract, it was held that the contractor nevertheless had a right to rely upon the inaccurate statements, that the misrepresentation in reference thereto was constructive even though not actual fraud, and that the contractor could not have been expected, under the circumstances, to make borings of

[ 387 Pa. Page 66]

    his own to check on the information set forth in the contract. In Lake v. Thompson, 366 Pa. 352, 77 A.2d 364, it was held that the plaintiff could rescind his contract for the purchase of a house because of certain misrepresentations that had been made by the seller as to the good condition of the heating plant, plumbing and electric wiring, the court pointing out that the actual defects in this equipment were not readily observable as the result of ordinary inspection by one not an expert. On the other hand, in Abrams, Inc., v. Wolkov, 371 Pa. 44, 89 A.2d 359, it was held that where the parties entered into a written agreement in which the buyer of an apartment building acknowledged that he had entered into the agreement as the result of an inspection of the premises made by him and not as the result of any advertisement or statement by the seller, the buyer could not take advantage of a misrepresentation by the seller that each of the apartments in the building contained two bathrooms whereas in fact each contained only one, this being a fact determinable by the most casual examination.

Following the line of demarcation thus established it would seem clear that, in the present case, defendant could not have been expected, nor would it have been practically feasible for it, to make tests of the strength of the flooring, a condition which could have been ascertained only by an expert engineer. This is especially true in view of defendant's testimony that plaintiff's agent had pointed out steel beams and posts which he claimed had been recently installed for the purpose of strengthening the floor, with the further assurance that he himself had used the premises in the past for the storage of heavy furnaces and equipment.

Plaintiff's remaining contention is that, since defendant occupied the premises under the original two-year period of the lease and for almost a year of the

[ 387 Pa. Page 67]

    extended period and had paid the rent during all that time, it was estopped from justifying its removal from the premises because of plaintiff's alleged misrepresentation as to the condition of the flooring made at the time when the lease was entered into. It is true that ordinarily it is the duty of a tenant, under such circumstances, if he wishes to disaffirm the contract, to do so promptly; he cannot continue to occupy the property and pay the rent for a period of time and then claim the right to rescind the lease agreement on the ground that he was induced to enter into the contract by the misrepresentations of the lessor or his agent: Spaulding v. Justice, 68 Pa. Superior Ct. 133, 138, 139; Federal Metal Bed Co. v. Alpha Sign Co., 289 Pa. 175, 182, 183, 137 A. 189. Here, however, defendant's testimony is to the effect that, although the tenant of the first floor of the property, Metals Protection Company, testified that the beams occasionally cracked, that they notified defendant of this fact, and that defendant thereupon shifted the loads in an attempt to remedy the situation, it was only ...


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