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JOSEPH PAGANO AND VIRGINIA PAGANO v. REDEVELOPMENT AUTHORITY CITY PHILADELPHIA (06/29/77)

decided: June 29, 1977.

JOSEPH PAGANO AND VIRGINIA PAGANO, H/W AND ARNOLD PAGANO, APPELLANTS,
v.
REDEVELOPMENT AUTHORITY OF THE CITY OF PHILADELPHIA, APPELLEE



Appeal from Order of the Court of Common Pleas dated Dec. 24, 1974, denying Plaintiffs' Motion to Take Off Non-Suit as of September Term, 1969 at No. 4038. C.P.-Trial Div., Law-Phila.

COUNSEL

Lewis Kates, Philadelphia, for appellants.

J. Paul Erwin, Jr., Philadelphia, and White & Williams, Philadelphia, submitted a brief for appellee.

Watkins, President Judge and Jacobs, Hoffman, Cercone, Price, Van der Voort and Spaeth, JJ. Price, J., files a dissenting opinion.

Author: Spaeth

[ 249 Pa. Super. Page 307]

This is an appeal from the denial of a motion to take off a compulsory non-suit in a trespass action. The theory of the action is that the relationship between appellee and appellants was that of landlord and tenants, and that as a landlord, appellee violated the duty of care owed to its tenants.*fn1 The question presented is whether the lower court erred in concluding that as a matter of law appellants had failed to prove that they were tenants.

I

Appellants Virginia and Joseph Pagano and their son Arnold, lived from 1956 through 1969 in a second floor apartment at 3711 Spruce Street in Philadelphia. From 1955 on, the family operated a restaurant in an adjoining building, 3713 Spruce Street, known as "Campus Joe's."

[ 249 Pa. Super. Page 308]

Both premises were rented: the restaurant was rented from the owner of 3713 Spruce Street, and the apartment from the primary tenant of 3711 Spruce Street, Charles Zahn, who operated a haberdashery known as the Varsity Shop on the first floor. The Paganos entered their apartment from an outdoor stairway at the rear of 3711 Spruce Street. The Varsity Shop could be entered through a front or rear entrance, and did not provide access to the Paganos' apartment.

In 1965, appellee, the Redevelopment Authority, entered into a loan and grant contract with the federal government to obtain the funds necessary for condemnation in the University City Urban Renewal Area. A Declaration of Taking that included 3711 and 3713 Spruce Street was filed in Common Pleas Court in September, 1966. However, the Paganos continued to occupy both the restaurant and the apartment, paying their rent for the restaurant to the Redevelopment Authority and for the apartment to Mr. Zahn. They planned to move the family restaurant business, as well as their residence, to an enlarged facility at 3910 Chestnut Street at a future date.

Beginning perhaps sometime in 1968, the occupants of the 3700 block of Spruce Street began relocating their residences and businesses. Mr. Zahn moved to a new location in June, 1968, terminating his lease with the Redevelopment Authority, leaving the first floor of 3711 Spruce Street, where the Varsity Shop had been, vacant. The Paganos remained in the apartment above the vacant store with the knowledge and consent of the Redevelopment Authority. They did not pay any rent for the apartment, nor did the Authority ask them to pay any.*fn2 They did, however, continue to pay suppliers for heat, gas and electricity for the apartment.

[ 249 Pa. Super. Page 309]

Soon after Mr. Zahn moved out, the Paganos began to observe vandalism in the vacant store. Arnold Pagano testified that he constantly saw "people just going in looking for something of any kind of value that could be used, anything in general, whatever they felt could be used . . . ." (R. 43a) On one occasion, Joseph Pagano caught an employee of the Redevelopment Authority carrying out the water meter for his own personal use. (R. 166a-168a) Occasionally Joseph Pagano heard noises at 2:00 a.m. and went downstairs to investigate. (R. 171a) Virginia Pagano also testified to illegal activities:

At first there was a lock on the door. Well, shortly after that, when people see that there is a vacant place in the neighborhood, they just -- they don't waste any time breaking in. They break in, and they start taking shelving. They take whatever is available. So on different occasions, I myself made at least 5 or 6 phone calls . . . . It was from time to time as we would see people in there. If I'd see them, I would call. If the waitresses would see them, they called. If my husband would see them, he called. I mean whoever would catch these people in there would make phone calls.

(R. 251a-252a)

Despite these many reports, the Redevelopment Authority did nothing effective to secure the vacant store.

On the afternoon of June 10, 1969, a fire started in the vacant store. Arnold Pagano, who was resting in the apartment, was severely burned, and most of the furniture and clothing in the apartment was destroyed. At trial, Fire Marshall Stevens testified that the fire was "a slow buildup type of fire" (R. 125a), and that "[b]ased on [his] investigation of the physical spread of the fire, considering the time that the fire started from [his] opinion and the spread, [he] arrived at the fact that the fire was started -- also taking into consideration the cigarette butts in the immediate area -- by a carelessly discarded cigarette." (R. 138a)

The Paganos' action in trespass against the Redevelopment Authority was tried before a jury on June 11 and 12,

[ 249 Pa. Super. Page 3101973]

. Following the presentation of the Paganos' evidence, the Authority's motion for a compulsory non-suit was granted. On June 14, 1973, counsel for the Paganos filed a motion to take off the non-suit. On December 24, 1974, the lower court denied the motion, explaining the reasons for its decision in a careful opinion, which has been of considerable assistance to us in arriving at our own decision.

II

A

The decision of the lower court turns upon the court's conclusion that "at best" appellants' relationship to appellee was that of tenants at sufferance. Thus the court states:

Plaintiffs [appellants] . . . lost their status as [sub]tenants when Mr. Zahn vacated the premises and the lease between him and the Authority [appellee] was at an end. Since [appellants] were not in privity of estate with [appellee] and only derived their rights, whatever they were, whether lawful or unlawful subtenants, from Mr. Zahn, when his right ceased, so did theirs. [Appellants] made no effort to lease or pay rental for the apartment they continued to occupy, although they did lease and pay rental for the adjacent restaurant building to the defendant. They became at best tenants at sufferance: persons who obtained the property lawfully, but who remained in possession without legal claim after lawful title was lost or terminated [citation omitted]. Such persons differ from a trespasser only in that they entered by permission of the owner, and they acquired no lessee's rights and no fixed term, remaining in possession due to the neglect of the owner to disturb him [citation omitted].

Lower Court Opinion at R. 494a-95a.

Because of this conclusion the lower court determined that appellee owed appellants only the lesser duty owed by a land owner to licensees, ...


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