diff --git a/change_log.txt b/change_log.txt
index 24689fa4..a7dc1a18 100644
--- a/change_log.txt
+++ b/change_log.txt
@@ -1,4 +1,7 @@
 ===== trunk  =====
+01.11.2012
+- bugfix muteExcpetedErrors() would screw up for non-readable paths (Issue #118)
+
 ===== Smarty-3.1.12  =====
 14.09.2012
 - bugfix template inheritance failed to compile with delimiters {/ and /} (Forum Topic 23008)
diff --git a/libs/Smarty.class.php b/libs/Smarty.class.php
index 54649927..ccececae 100644
--- a/libs/Smarty.class.php
+++ b/libs/Smarty.class.php
@@ -1392,10 +1392,12 @@ class Smarty extends Smarty_Internal_TemplateBase {
         // add the SMARTY_DIR to the list of muted directories
         if (!isset(Smarty::$_muted_directories[SMARTY_DIR])) {
             $smarty_dir = realpath(SMARTY_DIR);
-            Smarty::$_muted_directories[SMARTY_DIR] = array(
-                'file' => $smarty_dir,
-                'length' => strlen($smarty_dir),
-            );
+            if ($smarty_dir !== false) {
+                Smarty::$_muted_directories[SMARTY_DIR] = array(
+                    'file' => $smarty_dir,
+                    'length' => strlen($smarty_dir),
+                );
+            }
         }
 
         // walk the muted directories and test against $errfile
@@ -1403,6 +1405,11 @@ class Smarty extends Smarty_Internal_TemplateBase {
             if (!$dir) {
                 // resolve directory and length for speedy comparisons
                 $file = realpath($key);
+                if ($file === false) {
+                    // this directory does not exist, remove and skip it
+                    unset(Smarty::$_muted_directories[$key]);
+                    continue;
+                }
                 $dir = array(
                     'file' => $file,
                     'length' => strlen($file),