No. 8 April Term, 1979, Appeal from the Order of the Court of Common Pleas, Clearfield County, Civil Division, at No. 77-1472-CD.
Anthony S. Guido, DuBois, for appellants.
David P. King, DuBois, for appellees.
Cercone, President Judge, and Price, Spaeth, Hester, Cavanaugh, Wickersham, Brosky, Wieand, Johnson, Montemuro, Popovich, DiSalle and Shertz, JJ. Spaeth, J., files a concurring opinion. Johnson, J., files a dissenting opinion in which Price, Cavanaugh and Popovich, JJ., join. Brosky, J., files a dissenting opinion. The case was decided prior to the expiration of commission of office of DiSalle and Shertz, JJ.
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This appeal involves the question of whether or not a vendor of real estate is liable for failing to disclose his knowledge of a termite infestation to an unknowing purchaser.
In May of 1973, Eldred and Jean Frost, appellants herein, sold their residence to the appellees, Theodore and Joanne Quashnock. The appellants put their house up for sale because Mr. Frost was about to be transferred to a different location by his employer. The Quashnocks expressed an interest in purchasing the residence and asked to be the first to look at it. After examining the house one evening in May of 1973, the Quashnocks advised the Frosts on the next day that they had decided to purchase the property. The Frosts made no representations with respect to the presence of termites, nor did the Quashnocks specifically inquire as to
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this fact. Moreover, two representatives of the bank which extended the mortgage to the Quashnocks inspected the house and they were neither informed of, nor did they independently discover, the termite infestation. The house was accordingly conveyed on May 28, 1973.
At trial, the Frosts themselves admitted that they had discovered the termite infestation in January of 1971. Around this time when a neighbor and friend, Mrs. Hughes, was visiting, Mrs. Frost showed her a baseboard in the livingroom which was eaten through. Also, there was sawdust on the floor, the rug was frayed, and the floor had weakened. A few weeks later, a termite exterminator was at the home of one of Mrs. Hughes' other neighbors. Mrs. Hughes asked him if he would take a look at Mrs. Frost's house to determine if she also had termites. When the exterminator agreed, he accompanied Mrs. Hughes to the Frost home, confirmed the fact that the house was, indeed, infested with termites, told them that the floor had weakened and showed them all of the places in the basement where the termites had left their mark. Although the exterminator offered his services, the Frosts declined to expend the sum of $240.00 to rectify the situation. Instead, they attempted to rid themselves of the pests by spreading powder in the basement area of their home. It was adduced at trial, however, that they knew this preventive action was not successful. Thus, the Frosts admit that they were aware of the termite infestation at the time of the sale.
In January of 1977, as Mr. Quashnock came up the back stairs of the house, he noticed that some paint chips had fallen from the back of a step. When he looked more closely he saw grooves in the wood underneath where the paint had been. The very next day, Mrs. Quashnock had her son remove some old wood that was in the crawl space of the home adjacent to the regular basement. This dirt bottomed area was located under the dining room of the house and access was gained from the basement through a small window on hinges. When they attempted to saw the wood into smaller pieces to burn in the fireplace, the Quashnocks
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discovered that it was eaten through and that there were "all kinds of grooves" in it. After calling an expert to confirm their suspicion that the dwelling was infested by termites, the Quashnocks arranged to have the place exterminated at the earliest feasible time. This, however, could not be done properly until springtime when the ground had thawed. Sometime thereafter, the task was completed and the Quashnocks undertook to repair the damaged areas.
After the Quashnocks discovered the infestation, but before the actual extermination, Mrs. Hughes was visiting with Mrs. Quashnock for the first time. When Mrs. Quashnock mentioned that they were going to have the house exterminated for ants, Mrs. Hughes indicated that there were more than ants and proceeded to show Mrs. Quashnock the crawl space, the sills, the beams and all of the other areas in the basement which the exterminator had previously indicated were infested with termites. Mrs. Hughes testified at trial that the exterminator had informed her and Mrs. Frost that the "mud channels" which were present on the beams in the basement were one of the visible signs of termites being present. However, when Mrs. Hughes went to show Mrs. Quashnock where these mud channels were, she discovered that the channels had been scraped down and the basement painted. The Frosts admit that they painted the basement but claim that the beams were not painted and that, in any event, their motive was not to conceal. Nevertheless, Mr. Beish, an expert produced by the Quashnocks testified that painting the beams would cover the mud channels and cause them to cave in, thus making them hard to detect:
BY [PLAINTIFFS' ATTORNEY]:
Q. Mr. Beish, I have just a couple questions. There was some talk in Cross-Examination about mud channels and paint. All right. What effect would painting have with mud channels, or on the mud channels?
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A. It covers them up and also caves [them] in. Once they are caved in and covered up like that, normally the termite will go in another direction because they have caved in their access area and go to another area that is darker. And they won't come back.
They don't like to surface. When they surface they build them [sic] mud channels. Once you knock the channels off and paint over, there is something about the pigment in the paint they don't care for. They seem to go in another direction. They can still come back out on the paint, not normally, but they can.
Q. Did they in this case?
A. When I seen [sic] the area they was [sic] back out on it at the time, this was back when I inspected it.
Q. Okay, did the paint -- would painting have any --
A. If you are asking about killing power, no.
Q. No, would it conceal the presence of termites?
A. For a limited time. Just like anything else. If you have an old rusted car, paint over it, looks good for a while.
Q. It would for a time being.
A. Yes, it would just be a matter of time before --
A. After some swarm they come right back out again.
[PLAINTIFFS' ATTORNEY]: I have no further questions.
BY [DEFENDANTS' ATTORNEY]
Q. Mr. Beish, you say the average person does not recognize mud channels as being [evidence of the presence of] termites.
Q. They just think some mud [is] on the beam, is that correct ?
A. That is correct, because it can come in different sizes.
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A. I say, that is correct, because it can come in different sizes.
Q. And how long would paint conceal the termite[s], for example?
A. That is another hard question, that depends on how bad your infestation is in the area you paint. That could go for a couple years, three years, four years, or could even go a year and come back out.
The Quashnocks instituted this action in trespass in the Court of Common Pleas of Clearfield County claiming as damages the cost of exterminating and repairing their home. After a non-jury trial, the court held the Frosts liable and stated in its opinion:
In this case, the [Frosts] sold certain premises to the [Quashnocks] which they knew to be infested with termites, and although they did not actively conceal said infestation or certify to the nonexistence of said termites, nevertheless, the condition was such that to the casual inexperienced inspector their presence would not be revealed. This court is of the opinion that there was a duty in the sellers to disclose this condition to the buyers regardless of the buyers' failure to specifically inquire as to the existence of termites.
Damages were, therefore, awarded in the amount of $8,836.00, but were later reduced to $5,192.74 as a result of appellants' exceptions. This appeal followed.
In Pennsylvania, there is binding and persuasive authority which extends a seller's liability to a failure to disclose a termite infestation of which he has knowledge. See Glanski v. Ervine, 269 Pa. Superior Ct. 182, 409 A.2d 425 (1979). The dissenting opinion herein characterizes the Glanski decision as one involving material misrepresentation, and so distinguishes the case from the instant matter. This reading by the dissent, however, is only partially correct. In Glanski there were two defendants: (1) the real estate broker who misrepresented the true facts, and (2) the silent seller of the
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house.*fn1 Clearly, the broker, Graff, was held liable due to his misrepresentations. However, the silent seller of the property, Ervine, was also held responsible for his failure to disclose. With regard to the seller's liability, the Glanski court wrote:
Here, there was sufficient evidence to support the verdict against appellant Ervine, for he admitted he had known about the termites. A seller has a duty to disclose conditions that are dangerous to the purchaser. Shane v. Hoffman, supra [227 Pa. Superior Ct. 176, 324 A.2d 532]; Restatement, Torts (Second), § 353. In particular, a seller must disclose a termite infestation. DeJoseph v. Zambelli, 392 Pa. 24, 139 A.2d 644 (1958) (per curiam affirmance of finding of liability of seller who did not disclose termite infestation); Shane v. Hoffman, supra (citing DeJoseph v. Zambelli, supra).
269 Pa. Superior Ct. at 191-92, 409 A.2d at 430.
The Glanski decision cited Shane v. Hoffman, 227 Pa. Superior Ct. 176, 324 A.2d 532 (1974) and DeJoseph v. Zambelli, 11 D.&C.2d 447 (1957) aff'd per curiam 392 Pa. 24, 139 A.2d 644 (1958) as authority for its holding. It is true that those cases factually involved acts of concealment or material misrepresentations. Nevertheless, the general principle of law which the Glanski court gleaned from those cases is accurate and the factual differences are of no import with respect to the applicability of the general rule requiring disclosure.*fn2 In DeJoseph it was stated:
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Where a party is induced to enter into a transaction with another by means of the latter's fraud or material misrepresentation, such a transaction can be avoided by the innocent party. Fraud arises where the misrepresentation is knowingly false, where there is any intentional concealment calculated to deceive or where there is a non-privileged failure to disclose.
Id. at 452. See also Clarke v. Assurance Co., 146 Pa. 561, 23 A. 248 (1892) (per curiam decisions have the binding force and effect of law).
Likewise, the Shane v. Hoffman decision quoted similar language to the effect that ". . . fraud consists in anything calculated to deceive, whether by single act or combination, or by suppression of truth, or a suggestion of what is false, whether it be direct falsehood or by innuendo, by speech or silence, word of mouth, or look or gesture. It is any artifice by which a person is deceived to his disadvantage." 227 Pa. Superior Ct. at 181-82, 324 A.2d at 536. (Emphasis added) (quoting McClellan Estate, 365 Pa. 401, 407, 75 A.2d 595, 598 (1950). Moreover, in Shane, this court held the vendor liable not only on principles of respondeat superior but also because she was a silent seller who breached a duty to disclose:
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. . . In this jurisdiction, the courts have long recognized a duty to disclose conditions which are dangerous to the purchaser or other persons using the property of another.
227 Pa. Superior Ct. at 184-85, 324 A.2d at 537-38.
Therefore, while DeJoseph and Shane may be read narrowly as being factually distinguishable from Glanski and the case at hand, the general principles of law they articulated are equally applicable to both factual scenarios. Regardless of DeJoseph and Shane, however, the question presented in this appeal was squarely presented and determined in the purchaser's favor by this Court in Glanski. Thus, there is Pennsylvania authority directly on point that a seller has an affirmative duty to disclose a termite infestation of which he has knowledge. See Annotation, 22 A.L.R.3d 972 (Supp.1981) (citing Glanski in support of the proposition that Pennsylvania subscribes to the view that a duty to disclose exists).
In seeking enlightenment from other jurisdictions, one will uncover two opposing views in the area of nondisclosure. Absent active concealment or material misrepresentations, the traditional view holds that there is no duty to disclose no matter how unfair -- caveat emptor. See Swinton v. Whitinsville Sav. Bank, 311 Mass. 677, 42 N.E.2d 808 (1942); Fegeas v. Sherrill, 218 Md. 472, 147 A.2d 223 (1958); Hendrick v. Lynn, 37 Del.Ch. 402, 144 A.2d 147 (1958). The modern view,*fn3 however, holds that where there is a serious
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and dangerous*fn4 latent*fn5 defect known to exist by the seller,*fn6 then he must disclose such ...