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filed: June 29, 1984.


No. 814 Pittsburgh 1983, Appeal from the Judgment of the Court of Common Pleas, Civil Division, of Butler County at No. CP 83-1012 BK 185/P 419.


James E. Kerr, Butler, for appellants.

William C. Robinson, Butler, for appellee.

Wieand, Tamilia and Popovich, JJ. Wieand, J., filed a dissenting opinion.

Author: Popovich

[ 331 Pa. Super. Page 329]

This is an appeal by appellants, Ward and Rachel Cratty, from a judgment which was entered in favor of appellee, Wilda Fannin, after a trial involving an auction sale of the Cratty's house.*fn1 We affirm.

On Tuesday, June 30, 1981, Wilda Fannin attended the auction of a house owned by appellants and successfully outbid all competing entrants. The property was "knocked down" to her at a price of $45,500, and she immediately posted a 10 per cent downpayment in accordance with the terms of the sale. Prior to the auction, appellee had inspected the house in the company of Blanche E. Miller, attorney-in-fact for and a representative of appellants. During Fannin's inspection, personal belongings were in the process of being removed from the house. Boxes of assorted

[ 331 Pa. Super. Page 330]

    paraphernalia were positioned temporarily in a manner which obstructed the view of a deteriorating basement wall.

On Saturday, July 4, 1981, appellee reappeared at appellants' property and commenced a further tour, accompanied by her insurance agent. At this time, the basement was vacant. Sometime after that visit, appellee demanded the return of her $4,550. Appellee's insurance agent testified at trial that he refused to insure the property at that time because of the hazard posed by the collapsing basement wall.

After appellee's request was denied, she commenced suit on July 23, 1981, seeking the return of her downpayment. Appellants filed a counterclaim alleging damages in the amount of $6,500, which represented the difference between the bid price of $45,500 and $39,000, the price subsequently offered to them by a third party. A jury trial commenced on May 19, 1983, which resulted in a verdict for appellee in the amount of $3,500 and against appellants' counterclaim. Post trial motions were filed and denied. Judgment was entered, and this appeal followed.

Appellants present two issues for our consideration. First, they argue that the trial court erred in instructing the jury on the applicability of the Statute of Frands.*fn2 They contend that, notwithstanding the oral nature of the contract, either party may seek damages incurred as a result of the other's breach. Since they claim that appellee breached the oral agreement, they seek damages equal to the loss of their bargain.*fn3

[ 331 Pa. Super. Page 331]

Second, appellants argue that the trial court erred in submitting to the jury the question of whether the condition of the defective basement wall was a latent defect. According to appellants, this legal question was an issue to be resolved by the trial court.

Turning to the applicable legal standard which governs the instant case, we recognize that this Court will not reverse the trial court's order "'absent an abuse of discretion or error of law which controlled the outcome of the case.'" Allison v. Snelling & Snelling, Inc., 425 Pa. 519, 521, 229 A.2d 861, 862 (1967); see also, McDevitt v. Terminal Warehouse Co., 304 Pa. Super. 438, 450 A.2d 991 (1982), Litman v. Peoples Natural Gas Co., 303 Pa. Super. 345, 449 A.2d 720 (1982). Moreover, in reviewing the verdict, we must view the evidence in a light most favorable to the verdict winner, the appellee. Our sole duty is to decide where there was sufficient evidence to sustain the verdict. McDevitt v. Terminal Warehouse Co., supra. With the foregoing principles in mind, we must affirm.

To begin with, the Statute of Frauds provides in effect that no agreement for the sale of real estate will be enforced unless it is in writing and signed by the party to be charged.*fn4 Its fundamental purpose is to prevent assertions of verbal understandings and thus to obviate the opportunity for fraud and perjury. Brotman v. Brotman, 353 Pa. 570, 46 A.2d 175 (1946); Manley v. Manley, 238 Pa. Super. 296, 357 A.2d 641 (1976).

Appellants contend that the Statute of Frauds has no application to the instant case because the relief sought is monetary damages, rather than the alternative equitable remedy of specific performance. Appellants correctly point out that we have held that liability will be imposed for

[ 331 Pa. Super. Page 332]

    breach of an oral agreement in an action for monetary damages notwithstanding the fact that the Statute of Frauds rendered the oral agreement unenforceable in an action for specific performance. Polka v. May, 383 Pa. 80, 118 A.2d 154 (1955); Weir v. Rahon, 279 Pa. Super. 508, 421 A.2d 315 (1980). However, in order to accept appellants' contention, the record must establish first that a breach by the buyer has occurred. In view of the jury's verdict in favor of appellee, the buyer, we may infer that the buyer did not breach the contract, and that she was entitled to rescind the oral agreement because of the existence of the latent defect. See Adams v. Euliano, 299 Pa. Super. 348, 445 A.2d 788 (1982), Shane v. Hoffmann, 227 Pa. Super. 176, 324 A.2d 532 (1974).

In reaching this conclusion, we must set forth the following guidelines:

The Statute of Frauds does not void those oral contracts relating to land which fail to comply with the Statute's formal requirements. Zlotziver v. Zlotziver, 355 Pa. 299, 49 A.2d 779 (1946). It is to be used as a shield and not as a sword, as it was designed to prevent frauds, not to encourage them. Gerlock v. Gabel, 380 Pa. 471, 112 A.2d 78 (1955).

In the case of a breach of a valid oral contract by a buyer, the Statute of Frauds cannot be employed to recover a downpayment voluntarily made, in the absence of nothing more. Roberts v. Roesch, 306 Pa. 435, 159 A. 870 (1932). Similarly, in the case of a breach by the seller, the Statute has been construed as allowing damages to the buyer of "the money that was paid on account of the purchase". Polka v. May, supra, 383 Pa. 84, 118 A.2d 156. Moreover, either party who is injured as a consequence of the other party's breach may recover "the expenses ...

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