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decided: September 24, 1985.


Appeal from the Order of the Superior Court at No. 146 Harrisburg, 1982, Entered on April 19, 1984, Affirming the Order of the Court of Common Pleas of Adams County at No. 80-S-157, Vacating Judgment in Favor of and Entering Judgment N.O.V. in Favor of Appellee, Ed Saxe Real Estate, Inc. 327 Pa. Superior Ct. 429, Nix, C.j., and Larsen, McDermott, Hutchinson, Zappala and Papadakos, JJ. Flaherty, J., did not participate in the consideration or decision of this case. Zappala, J., concurred in the result.

Author: Papadakos

[ 508 Pa. Page 555]


This is the appeal of Michael J. Aiello and Kathy Ann Aiello, Appellants, from that portion of the Opinion and Order of the Superior Court which vacated a judgment entered against Ed Saxe Real Estate, Inc. (Saxe), Appellee, and entered judgment N.O.V. in favor of Saxe, in Appellants' trespass action against Saxe and Sidney F. Jones, Jr. (Jones) for fraudulent misrepresentation.

Appellants, a young married couple, were interested in purchasing real estate on which they intended to build their home and to subdivide the remainder of the land. After talking with Michael Aiello's brother, Appellants decided they would contact Ed Saxe Real Estate, Inc., a local real estate agency, owned by Ed Saxe. Jim Aiello had purchased property through Saxe which he subdivided and sold off successfully and Jim convinced Appellants that Saxe would be helpful in locating land which they could subdivide.

As sole owner of Ed Saxe Real Estate, Inc., Ed Saxe was the licensed broker pursuant to the "Real Estate Licensing and Registration Act," Act of February 19, 1980, P.L. 15, No. 9, § 101, et seq., 63 P.S. § 455.101, et seq., and, as such,

[ 508 Pa. Page 556]

    was responsible for all sales and purchases of real estate negotiated by him or through his salespersons.*fn1 Jones, a licensed salesperson, was employed by Saxe (63 P.S. § 455.603),*fn2 displayed his salesperson license in Saxe's office (63 P.S. § 455.601),*fn3 and was actively supervised and trained by Ed Saxe (63 P.S. § 455.522)*fn4 pursuant to the requirements imposed upon Ed Saxe by the terms of the Act. When Appellants contacted Saxe, Jones was assigned by Saxe to help them.

Appellants explained to Jones their interest in acquiring acreage and he began showing them several tracts, including

[ 508 Pa. Page 557]

    an 87-acre parcel owned by a Mr. Lystad, not a party to this case. This particular tract was the subject of a brokerage agreement between Lystad and Saxe which authorized Saxe to find a buyer for the land.

While viewing this tract, Appellants inquired of Jones whether the property was suitable for a sewage disposal system. Jones assured them that he was familiar with soil types and disposal requirements, that he had reviewed a survey of soils in Huntingdon Township, Adams County (the location of the property), that the soils were good, and that of five percolation tests performed on the subject property, three showed the soil to be suitable for conventional sewage systems and two for sand mounds. Further, Jones stated that had the percolation tests been performed in dry weather, all five would have indicated that the land was suitable for a conventional sewage system.

Based on these representations, Appellants entered into an agreement for the purchase of the 87-acre tract for $80,000.00. A closing was held in due course and Lystad executed and delivered his deed for the property to Appellants. Subsequently, Appellants conducted their own percolation tests and discovered that the soil was unsuitable for any type of sewage system or sand mound. Upon further investigation, they discovered that a prior sales agreement for the same property negotiated by Saxe had fallen through owing to the failure of the land to pass the five percolation tests. Of a series of twenty-one soil probes, twenty had shown that the soil was unsuited for a sewage system and one probe had indicated that the soil was marginally suitable for a sand mound system, but not a conventional system.

Appellants, thereupon, filed a trespass action against their agent, Ed Saxe Real Estate, Inc., a broker, and its salesperson, Sidney F. Jones, Jr., for the fraudulent misrepresentations which induced them to purchase the property. The cause proceeded to trial before a jury presided over by the Honorable Oscar F. ...

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