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MICHAEL J. AIELLO AND KATHY ANN AIELLO v. ED SAXE REAL ESTATE (04/19/84)

filed: April 19, 1984.

MICHAEL J. AIELLO AND KATHY ANN AIELLO
v.
ED SAXE REAL ESTATE, INC., AND SIDNEY F. JONES, JR., APPELLANTS



No. 146 Harrisburg, 1982, Appeal from the Order of April 7, 1982 in the Court of Common Pleas of Adams County, Civil Division, No. 80 S 157

COUNSEL

Daniel W. Shoemaker, York, for appellants.

Henry O. Heiser, III, Gettysburg, for appellees.

Wickersham, Wieand and Cercone, JJ. Wieand, J., concurs in the result.

Author: Cercone

[ 327 Pa. Super. Page 432]

This appeal arises from the judgment entered against Ed Saxe Real Estate, Inc., and its salesperson, Sidney F. Jones, Jr., who were defendants in an action in trespass for fraudulent misrepresentation.*fn1 Plaintiffs, Michael J. and Kathy Ann Aiello, sought to prove that Jones deliberately misrepresented to them the soil conditions of a tract of land which they eventually purchased. Because the soil was unsuitable for a conventional sewage system, a fact which they claimed was known to Jones, but not conveyed to them in spite of their direct inquiries, their plans to subdivide the tract in the manner which they had intended were thwarted. A jury awarded the plaintiffs, appellees herein, a verdict in the amount of $13,400.00 against Jones, and a verdict of $12,000.00 against Ed Saxe Real Estate, Inc., hereinafter Saxe. For the reasons set forth below, we vacate the judgment in favor of appellee as against appellant Saxe, and enter judgment N.O.V. in Saxe's favor. We affirm the judgment as to appellant Sidney F. Jones, Jr.

In reviewing a lower court's denial of a motion for judgment non obstante veredicto, we will only reverse the lower court when we find "an abuse of discretion or an error of law which controlled the outcome of the case."

[ 327 Pa. Super. Page 433]

    disclosed to appellees just how poor the soil was. Ed Saxe testified that he owned the real estate firm which is also appellant in this case. As the trial court stated in its opinion, it is undisputed that Saxe Real Estate had no knowledge of any representation when it was made, did not participate in making it, and has not expressly ratified it. It is also undisputed that no percolation tests were performed on the property prior to appellees' purchase and that the soils were poor.

Appellees' theory against Ed Saxe Real Estate Company, Inc., was solely on the theory of respondeat superior. After pre-trial briefs and arguments on this issue, and additional argument at sidebar, the trial court ruled, as a matter of law, that Saxe could indeed be found liable, if the jury found liability existed as to Jones. This ruling of the trial court was in error, and, which fact compels our reversal and entry of judgment in favor of Saxe.

Our starting point is the tort of fraudulent misrepresentation or deceit, which is the basis of the within cause of action. Our court has set forth the elements of such an action.

The elements of a fraud and deceit action in trespass may be said to consist of: (1) a false representation of an existing fact, Fidurski v. Hammill, 328 Pa. 1, 195 A. 3 (1937); (2) if the misrepresentation is innocently made, then it is actionable only if it relates to a matter material to the transaction involved; while, if the misrepresentation is knowingly made or involves a non-privileged failure to disclose, materiality is not a requisite to the action, DeJoseph v. Zambelli, 392 Pa. 24, 139 A.2d 644 affirming 11 Pa.D. & C.2d 447 (1958); (3) scienter, which may be either actual knowledge of the truth or falsity of the representation, reckless ignorance of the falsity of the matter, or mere false information where a duty to know is imposed on a person by reason of special circumstances (16 P.L.E., Fraud ยงยง 7, 4) reliance, which must be justifiable, so that common prudence or diligence could not have ascertained the truth; and (5) damage to the person

[ 327 Pa. Super. Page 435]

    relying thereon. Shane v. Hoffmann, 227 Pa. Superior Ct. 176, 182, 324 A.2d 532, 536 (1974).

And in the same case, we explained that, in requiring proof of scienter on the part of a principal at the time of a misrepresentation made by an agent, our law in Pennsylvania does not follow the general rule.*fn2 In Carl W. Littler et ux. v. Everett B. Dunbar, trading as Acme Real Estate Company, et al., 166 Pa. Superior Ct. 271, 70 A.2d 365, reversed on other grounds, 365 Pa. 277, 74 A.2d 650 (1950), an agent of Dunbar informed the purchasers of a home that the attached garage, for which he had no key, was certainly long enough to accommodate any then modern automobile like the purchasers' Lincoln Zephyr. On the strength of his representation, the purchasers signed a sales agreement and paid $1,000.00 in hand money toward their purchase of the house. When the inadequacy of the garage was discovered, the purchasers sued only the broker Dunbar, to recover their hand money. Citing to the necessity of scienter on ...


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