Fisher v. Simon

• Citation: 15 Wis.2d 207,112 N.W.2d 705
• Parties: Richard C. FISHER et al., Respondents, v. Donald E. SIMON et al., Appellants.
• Decision Date: 29 December 1961
• Court: United States State Supreme Court of Wisconsin

Page 705

112 N.W.2d 705

15 Wis.2d 207

Richard C. FISHER et al., Respondents, v. Donald E. SIMON et al., Appellants.

Supreme Court of Wisconsin.

Dec. 29, 1961.

Action by vendees Richard C. Fisher and wife against their vendors, Donald E. Simon and wife, to recover damages incurred by plaintiffs in repairing the basement floor of the dwelling house located on the purchased premises. Because the damages prayed for were only $500, the action was brought in the small claims court of Dane county.

The complaint set forth two causes of action, one grounded on negligence and the other on implied warranty. The material allegations of the cause of action grounded on negligence are:

'3. That immediately prior to April 2, 1958, the defendants, as building contractors, constructed a single family dwelling on Lot 63, Benz Acres, in the Village of Sun Prairie, Dane County, Wisconsin; that said dwelling was built and constructed as a new building for the purpose of sale to the general public; that in constructing said building for such purpose, it was the duty of the defendants to use ordinary care in the construction of the same or the same degree of care used by similar building contractors in this vicinity in constructing houses for such purpose.

'4. That on April 2, 1958, plaintiffs entered into a contract to purchase said home directly from defendants and consummated said contract and took possession on or about May 1, 1958, and have ever since been owners of said property as direct vendees of defendants.

'5. That subsequent to plaintiffs' occupancy of said house, and particularly within one year thereof, the basement floor in said house cracked in many places with cracks wide enough to permit seepage of water directly upward through said cracks onto the basement floor; that such cracks occurred by reason of negligent construction of said house in that the defendants, in constructing the same, negligently and carelessly back-filled around the exterior of said walls in such manner as to permit large open holes for pockets of water to accumulate and seep under-neath the basement floor and crack through said basement floor by means of hydrostatic pressure; that in connection with the negligent back-fill of said exterior area large holes ultimately appeared in the back-fill area and upon investigation it was discovered that pieces of timber and other debris were laying crosswise therein preventing solid settling or filling of the back-fill area and permitting the aforementioned pockets for accumulation of water to develop.

'6. That, as plaintiffs are informed and believe, defendants as general contractors and builders of said building knew, or in the exercise of ordinary care ought to have known, of such negligent back-filling and could have and should have constructed said house and back-filled the same in such manner so as to prevent such an occurrence.

'7. That at the time of purchase of said home said conditions were not open or apparent or capable of being discovered by plaintiffs.

'8. That by reason of the aforementioned negligence of the defendants in the construction of said home, it is necessary for plaintiffs to re-excavate around said entire basement wall and back-fill the same properly so as to fill and close up the pockets afore-described and to resurface the basement of said floor with new concrete all to their damage in excess of $500.00.'

Defendants demurred to the complaint on the ground that it failed to state facts sufficient to constitute a cause of action. The small claims court sustained the demurrer and entered judgment dismissing the complaint. Plaintiffs appealed to the circuit court. Under date of March 28, 1961, the circuit court entered an order which: (1) reversed the judgment; (2) sustained the demurrer to plaintiffs' second cause of action grounded on implied warranty; (3) overruled the demurrer to plaintiffs' first cause of action grounded on negligence; and (4) remanded the cause to the small claims court. Defendants have appealed from that part of the order which overruled the demurrer to plaintiffs' first cause of action.

Randolph R. Conners, Madison, for appellants.

Frank M. Coyne, James E. Quackenbush, Madison, for respondents.

CURRIE, Justice.

There is no issue before us with respect to whether a builder-vendor is liable to his vendee on implied warranty for latent defects in the building due to faulty construction. ¹ This is because there has been no appeal from that portion of the circuit court's order which sustained the demurrer to plaintiffs' second cause of action grounded on implied warranty. The sole issue on this appeal is whether a cause of action exists in favor of a vendee against the builder-vendor of a building for alleged negligence in construction resulting in a latent defect where the damages are limited to the expense of repairing the building?

Prosser states the elements requisite to a cause of action based on negligence as follows: (1) a legal duty to conform to a standard of conduct for the protection of others against unreasonable risks; (2) a failure to conform to the standard; (3) a reasonably close casual connection between the conduct and the resulting injury; and (4) actual loss or damage resulting to the interests of another. Prosser, Torts (2d ed.), p. 165, sec. 35. There can be no question but that, in their first cause of action, plaintiffs have alleged sufficiently elements (2), (3) and (4). They have also attempted to allege element (1), legal duty, by averring in paragraph 3 of the complaint:

'[T]hat in constructing said building for such purpose [that of sale], it was the duty of the defendants to use ordinary care in the construction of the same or the same degree of care used by similar building contractors in this vicinity in constructing houses for such purpose.'

However, whether or not defendant builder-vendors were under a legal duty to plaintiff vendees to exercise ordinary care in construction presents an issue of law. This court pointed out in Klassa v. Milwaukee Gas Light Co. (1956), 273 Wis. 176, 183, 77 N.W.2d 397, that, whenever a court determines no duty was owed by the actor to the injured party, although the act complained of caused the injury, the court is making a policy determination. Under the allegations of the instant complaint, defendants' acts did cause the injury complained of. Therefore, whether defendants should be relieved from liability on the ground that they were under no duty to the plaintiff to exercise due care in the construction of the house, presents an issue of policy which we must decide.

If defendants had constructed the instant house for plaintiffs under a contract directly entered into between the parties for such construction, we would have little difficulty in determining that the complaint stated a cause of action in tort. Such a situation confronted this court in Colton v. Foulkes (1951), 259 Wis. 142, 47 N.W.2d 901, except that the contract there was one for repair of a building instead of original construction. It was held that the complaint by the owner to recover for personal injuries stated a good cause of action against the contractor and his employees who had negligently performed the work. In support of this holding, the court cited 38 Am.Jur., Negligence, p. 661, sec. 20, which lays down the rule that accompanying every contract is a common law duty to perform it with care and skill, and a failure to do so is a tort as well as a breach of contract. While it is not expressly stated in the Colton Case, that plaintiff owner had accepted the work from the contractor prior to the accident, the inference is that he had. The modern trend is to hold a building contractor liable for injuries to third persons arising from his negligent construction even though such injuries occur after completion of the work and its acceptance by the owner. Anno. 58 A.L.R.2d 865, 891, and cases cited therein. The rationale of such modern view is stated by the author of the annotation as follows (at p. 891):

'[T]hese cases openly take the view that the duty owed by a building or construction contractor to third persons, after he has completed and turned over his work to the owner, is the same as that owed by the manufacturer or vendor of chattels to persons not in privity of contract with him, as that duty was expressed in the MacPherson case [MacPherson v. Buick Motor Co. (1916), 217 N.Y. 382, 111 N.E. 1050, L.R.A.1916F, 696].'

See also Prosser, Torts (2d ed.), p. 519, sec. 85, and cases there listed in footnote 37; 2 Harper and James, Law of Torts, pp. 1556, 1557, sec. 28.10. Prosser cites Colton v. Foulkes, supra, as determining that a contractor is held to the standard of reasonable care for the protection of anyone who may foreseeably be endangered by his negligence, 'even after acceptance of the work.'

This court, in decisions prior to the Colton Case, had expressed the view that independent building contractors could not be held liable for negligence after completion and acceptance of the work. See Schumacher v. Carl G. Neumann D. & I. Co. (1931), 206 Wis. 220, 239 N.W. 459, and Delaney v. Supreme Investment Co. (1947), 251 Wis. 374, 29 N.W.2d 754. We can perceive no justifiable reason why a building contractor should be relieved from all liability to third persons for his negligence after completion and acceptance of the work by the owner where the defect is concealed or latent in character. Therefore, we adhere to our decision in the Colton Case and expressly overrule the statements in the Schumacher and Delaney Cases that an independent building contractor cannot be held liable for negligence after completion and acceptance of the work.

As we have seen, in Colton v. Foulkes the contractor was held liable to the owner after apparent completion and acceptance of the work, not to some third person. However, the complaint in that case carefully alleged that the defect which caused the injury...