Court Opinion

ID: 9712455
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:54:17.41108+00
Date Added: 2024-06-11T18:23:12.332495
License: Public Domain

SPAETH, Judge,
concurring:
I agree that the judgment should be affirmed, but I reach that conclusion by reasoning somewhat different from the majority’s. Since the case is of more than usual importance, perhaps an alternative opinion regarding it may be of some value.
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This case was neither pleaded nor tried as a case of unfair dealing but, rather, as a case of fraudulent concealment. As the majority opinion shows, fraud might have been found. But it was not. Having found no fraud, the lower court might have dismissed the case. Instead the court held that a case of unfair dealing had been proved.1 The court said that as sellers the Frosts had “a duty ... to disclose this condition [the termite infestation] to the buyers regardless of the buyers’ failure to specifically inquire as to the existence of termites.” In support of this conclusion the court cited Restatement (Second) of Torts, Section 353, and Shane v. Hoffman, 227 Pa.Superior Ct. 176, 324 A.2d 532 (1974).
Section 353 says that a vendor of land is “subject to liability ... for physical harm caused by” an undisclosed *25condition that “involves unreasonable risk to persons on the land.” It is arguable that “physical harm” means that someone suffered personal injury.2 That would mean that even if the floors of a house were so infested with termites as to be unsafe to walk on, the vendor would not be liable under Section 353 unless some one walked on the floors, fell through, and was hurt.
I believe, however, that in imposing “liability” for failure to disclose a dangerous condition, Section 353 implies a “duty.” In the case I have just supposed, therefore, I should require the vendor to pay for repairs to the floors. This conclusion is supported by what we did in Shane. There the undisclosed dangerous condition was not termite-infested floors but a blocked sewer. We held that the vendor had a duty “to disclose any dangerous condition to life, limb or to the general health or safety of the purchaser and his family.” 227 Pa.Superior Ct. at 185, 324 A.2d at 538. We did not require proof that the undisclosed danger had resulted in personal injury to the purchaser or a member of his family. It was enough that injury was threatened. (The purchaser’s baby was not hurt; that was avoided by keeping the baby out of the house while the sewer was fixed. Id., 227 Pa.Super.Ct. at 186, 324 A.2d at 538.) We therefore affirmed a judgment requiring the vendor to pay for repairs to the sewer. We noted that the vendor’s duty to disclose was “evident, either by reason of the Restatement Rule [Section 353] or by well-settled common law principles.” Id.
In Century Display Manufacturing Corp. v. D. R. Wager Construction Co., Inc., 71 Ill.2d 428, 376 N.E.2d 993, 17 Ill.Dec. 664 (1978), the Supreme Court of Illinois also concluded that Section 353 was not limited to cases of personal injury. There, United States Steel Corporation sold a plant to Century Display Manufacturing Corporation. A fire broke out in the plant. Century claimed that the fire was caused by flammable liquid left in the plant’s tanks and pipes. United States Steel argued that recovery for the fire *26damage was not authorized by Section 353 because, it said, Section 353 “refers solely to recovery for personal injuries.” 71 Ill.2d at 434, 376 N.E.2d at 996, 17 Ill.Dec. at 667. The Supreme Court rejected this argument:
Although the overwhelming majority of cases in this area of tort liability concern themselves with recovery for damages incurred as a result of bodily injury (see Annot., 8 A.L.R.2d 218 (1949); Annot., 48 A.L.R.2d 1027 (1973); 65 C.J.S. Negligence 93 (1966)), it is clear that the term “physical harm,” as used in section 353, encompasses damages to tangible property as well as injuries to the person. 71 Ill.2d at 434, 376 N.E.2d at 996, 17 Ill.Dec. at 667.
Even so, I think Section 353 and Shane do not support the lower court’s decision. For while the evidence showed that there had been “physical harm caused by” the undisclosed condition—the termite infestation—it did not show that the condition “involve[d] unreasonable risk to persons on the land.” When the house was sold, the infestation was limited. After several years the infestation became more extensive. It is true, as the majority notes, that “supporting beams had been eaten away and . . . the floor had weakened.” At 125 n. 4. But still, it does not appear that there was a “dangerous condition to life, limb or to the general health or safety” of the Quashnocks.
-2-
When the lower court’s reasoning does not support its decision, we may still affirm if we are led to the same decision by another line of reasoning. E. J. McAleer & Co., Inc. v. Iceland Products, Inc., 475 Pa. 610, 381 A.2d 441 (1977); Sones v. Aetna Cas. and Sur. Co., 270 Pa.Superior Ct. 330, 411 A.2d 552 (1979). Here, I find such another line of reasoning in Restatement (Second) of Torts, Section 551, which says that a party to a business transaction has a duty to disclose
facts basic to the transaction, if he knows that the other is about to enter into it under a mistake as to them, and that the others, because of the relationship between them, the *27customs of the trade or other objective circumstances, would reasonably expect a disclosure of these facts.
The authors of Section 551 anticipated that it might support a recovery for termite infestation. Their third illustration to the section is:
3. A sells to B a dwelling house, without disclosing to B the fact that the house is riddled with termites. This is a fact basic to the transaction.
This illustration, however, is not dispositive. If the house is “riddled” enough there may be an unreasonable risk of physical harm, so that recovery may be had under Section 353. Therefore, the question we must decide is, when the house is not that riddled, as here it was not, may recovery nevertheless be had under Section 551?
There is no clear answer to this question. As the Comment to Section 551 notes, a balance must be struck. On the one hand:
To a considerable extent, sanctioned by the customs and mores of the community, superior information and better business acumen are legitimate advantages, which lead to no liability. The defendant may reasonably expect the plaintiff to make his own investigation, draw his own conclusions and protect himself; and if the plaintiff is indolent, inexperienced or ignorant, or his judgment is bad, or he does not have access to adequate information, the defendant is under no obligation to make good his deficiencies.
Comment, para. k.
On the other hand:
The continuing development of modern business ethics has, however, limited to some extent this privilege to take advantage of ignorance. There are situations in which the defendant not only knows that his bargaining adversary is acting under a mistake basic to the transaction, but also knows that his adversary, by reason of the relations between them, the customs of the trade, or other objective circumstances, is reasonably relying upon a disclosure of *28the unrevealed fact if it exists. In this type of case good faith and fair dealing may require a disclosure.
Comment, para. 1.
None of the other opinions that have been filed in this case cites Section 551.3 Implicitly, however, each of them engages in the process of striking a balance of the conflicting considerations identified in the Comment to the section. Judge BROSKY, and Judge JOHNSON, in separate dissents, strike the balance in favor of the Frosts; the majority strikes it in favor of the Quashnocks.4 I too strike it in favor of the Quashnocks.
Judge BROSKY and Judge JOHNSON both suggest—or so it seems to me—that because the lower court found that the Frosts were not guilty of fraudulent concealment, it follows that they were not guilty of bad faith. Thus Judge BROSKY says that the Frosts “did not think the problem was a serious one,” at 132, and Judge JOHNSON, that they “had good reason to believe that the .termites had not created a serious problem,” at 135. While thus excusing the Frosts’ failure to disclose the termite infestation, both judges fault the Quashnocks for their failure to discover the infestation, Judge BROSKY saying that the Quashnocks “were given ample opportunity to inspect the house,” at 132, *29and Judge JOHNSON, that they “neither utilized the opportunity to discover the termites in the crawl space, nor did they even inquire about termites,” at 136 (footnote omitted).
If nothing else, this case illustrates how reasonable men may differ. It seems clear to me, however, that a party not guilty of fraudulent concealment may nevertheless have engaged in bad faith dealing. I do not see how it can be maintained that the Frosts were acting in good faith, or that they engaged in fair dealing. They knew their house was infested with termites, and they also knew that the Quashnocks did not know it was. In deciding whether some one has engaged in “good faith and fair dealing,” Restatement (Second) of Torts, Section 551, Comment 1, we must ask ourselves, What sort of society do we want? The doctrine of caveat emptor answers this question by saying that we want a society of individuals dealing with each other as adversaries, each pushing his advantage, or supposed advantage, over the other as far as he can. The idea is that we will go farthest, both as individuals and as a society, if we compete with each other. Of course there is a good deal to this. But winning is not everything. And the law should not say it is. It may be granted that the law should not try to require too high a standard of conduct, for that would assume that we are better persons than we really are. But it does not follow that the law should be satisfied with saying, You can do anything so long as you don’t actually cheat. That gives too much play to selfishness, and surrenders too easily the advantages to be gained from cooperation.
Here, I submit, to excuse the Frosts’ conduct would represent just such a surrender. It is very little to require of an individual that he disclose a termite infestation that he knows exists. Furthermore, by requiring disclosure, a great deal may be gained. Here, with disclosure, the infestation could have been eliminated at the cost of a few hundred dollars. To excuse non-disclosure would countenance unnecessary waste. The Frosts must have known, especially after they consulted an exterminator, that if they did not disclose the infestation it would become more extensive. That is *30what termites do: they burrow unseen. To hold that disclosure was not required would be the same as saying that enabling the Frosts to profit by a few hundred dollars was more important than avoiding the waste of the five thousand dollars that the Quashnocks had to spend to eliminate the infestation, when they finally found it.
I concur in the order affirming the judgment.

. The Frosts did not except to the court’s thus, in effect, treating the complaint as though amended to conform the allegata to the probata.

. In his dissent Judge JOHNSON seems to accept this argument. At 133, n. 2. The majority does not consider it.

. The majority opinion cites other authority that is to the same effect. See at 125 n. 3., citing Prosser’s statement that “[t]he law appears to be working toward the ultimate conclusion that full disclosure of all material facts must be made whenever elementary fair conduct demands it.” Prosser, Law of Torts, § 106 (4th ed. 1971). See also the majority opinion’s citation of Keeton, Fraud— Concealment and Non-Disclosure, 15 Tex.L.Rev. 1 (1936). At 126.

. The majority engages in this balancing process only as an alternative basis of its decision, and in the second half of its opinion. At 125 et seq. In the first half of its opinion the majority states that this case is controlled by Glanski v. Ervine, 269 Pa.Superior Ct. 182, 409 A.2d 425 (1979), which the majority summarizes as holding that “a seller has an affirmative duty to disclose a [latent] termite infestation of which he has knowledge.” At 124. I acknowledge that Glanski contains language that supports this reading of it. It was, however, a case of fraudulent concealment, and I think should be read in that light. I therefore agree with Judge JOHNSON that our decision here is not controlled by Glanski, and may be seen as going beyond it. I am entirely persuaded, however, that we should go beyond Glanski.