Appeal from Order of the Court of Common Pleas, Civil Division, of Philadelphia County, No. 3834 May Term, 1983.
Robert M. Fellheimer, Philadelphia, for appellants.
Robert H. Dickman, Philadelphia, for Bell Sav., appellee.
David Weinstein, Philadelphia, for Langsdorf-Adler, appellee.
Brosky, Wieand and Beck, JJ.
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The principal contention made in this appeal is that the post-trial court erred when it changed the findings of the chancellor who had determined that a real estate transaction should be rescinded because of fraud. We are constrained to agree that appellant's contention is well taken; and, therefore, we reverse.
A review of the facts is essential to an understanding of the issues. In or about March, 1982, Bell Savings & Loan Association acquired title via mortgage foreclosure to premises known as 863 Township Line in Abington Township, Montgomery County. Bell listed the premises for sale with Langsdorf-Adler Company (Adler), a real estate broker. Adler prepared a multi-list card which recited, inter alia, that the premises measured thirty (30) feet by one hundred (100) feet and was zoned "F-1 Offices." The card also recited that the rear of the property was available for parking. After the property had been listed, Martin Arost, one of Bell's officers, had occasion to tell Louis Silverman, an attorney who was known to invest in real estate, that the premises were being offered for sale. Thereafter, Arost sent Silverman a copy of the listing card, and Mrs. Silverman
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was shown the property by an Adler employee. During Mrs. Silverman's inspection of the property she asked about and was told that parking was permitted on the rear eighty feet of the lot.
It was some time later that Adler discovered that the listed property actually consisted of two lots, with the front lot measuring 30 X 120 feet and the rear lot measuring 30 X 80 feet. Adler also discovered that the rear lot was not zoned for commercial use but for residential use. As such, commercial parking thereon was a prohibited use. Adler informed Bell of the error, but neither Adler nor Bell conveyed the correct information to Silverman. On May 12, 1982, Bell entered a written agreement to sell the premises to Mr. and Mrs. Silverman, who agreed to buy the same for $43,000.00.
Several days before closing, which was scheduled for July 6, 1982, Silverman toured the property with Mr. Adler who expressly represented that the rear portion of the lot was available for parking. At the closing, after Silverman had voiced some doubt regarding the zoning of the rear portion of the lot, a call was placed by Martin Laub, a Bell representative, to an unidentified employee of Abington Township. When Silverman was reassured by Laub, following Laub's call, that the zoning ordinance permitted the lot to be used for commercial purposes, the closing was completed.
Silverman made repairs to the building and leased the premises to Nancy Monahan for purposes of conducting a school for bartenders.*fn1 It was then learned, however, that a bartending school was not permitted in an "F-1 Offices" zone and that commercial parking was not permitted on the rear portion of the lot. When Silverman's efforts to obtain a variance were unsuccessful, the rental agreement was terminated.
The Silvermans filed an action in equity against Bell alleging fraudulent misrepresentation and seeking rescission
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of the real estate transaction. Bell caused Adler to be joined as an additional defendant. The action was tried without a jury before the Honorable William M. Marutani, who found that Bell and Adler had made and the Silvermans had relied upon material misrepresentations regarding the zoning classification of the property. The court awarded rescission and in connection therewith directed that Bell return all moneys received from the Silvermans. Bell and Adler were held jointly and severally liable for (1) interest paid by the Silvermans on account of moneys borrowed to complete the sale; (2) taxes paid by the Silvermans; and (3) insurance premiums paid by the Silvermans in order to insure the premises. The court refused to award damages to the Silvermans for repairs necessitated by vandalism after title had been conveyed and for costs and legal fees expended in an attempt to obtain a zoning variance.
All parties filed post-trial motions which, because of Judge Marutani's retirement, were heard by the Honorable Lois G. Forer. Judge Forer concluded that although Bell and Adler had misrepresented the zoning classification, the misrepresentation was not material and the Silvermans should not have relied upon it. She determined that rescission was an inappropriate remedy and that the Silvermans' only damages were the difference between the value of the rear lot if it had been zoned for commercial use and its actual value as zoned for residential use. A new ...