Hartley v. Ballou

• Decision Date: 26 November 1974
• Docket Number: No. 91,91
• Citation: 286 N.C. 51,209 S.E.2d 776
• Court: North Carolina Supreme Court
• Parties: Willkings L. HARTLEY v. George R. BALLOU and wife, Mildred H. Ballou.

Page 776

209 S.E.2d 776

286 N.C. 51

Willkings L. HARTLEY v. George R. BALLOU and wife, Mildred H. Ballou.

No. 91.

Supreme Court of North Carolina.

Nov. 26, 1974.

Bennett & McConkey by Thomas S. Bennett and James W. Thompson, III, Morehead City, for defendants appellants.

Hamilton, Hamilton & Philips by Luther Hamilton, Jr., Morehead City, for plaintiff appellee.

BOBBITT, Chief Justice.

G.S. § 1A--1, Rule 52(a)(1), provides: 'In all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment.' The rule does not require or contemplate that the court submit to itself issues of fact in the manner in which issues of fact are submitted to a jury.

Prior to the adoption of the Rules of Civil Procedure, G.S. § 1--185 in part provided: 'Upon trial of an issue of fact by the court, its decision shall be given in writing, and shall contain a statement of the facts found, and the conclusions of law separately.' In Wynne v. Allen, 245 N.C. 421, 96 S.E.2d 422 (1957), upon waiver of jury trial, the court submitted to itself and answered issues of fact framed in a manner appropriate for submission to a jury. Justice Rodman, speaking for the Court, stated: 'Issues arise on the pleadings. (Citations omitted.) To interpret and understand the issues submitted to and answered by a jury, it is proper to examine the pleadings, the evidence, and the charge of the court when there is a charge. (Citations omitted.)' Id. at 426, 96 S.E.2d at 427.

When an action is 'tried upon the facts without a jury,' there is no charge. The mandate of Rule 52(a)(1) requires that the trial judge 'find the facts specially'; and in lieu of giving instructions to a jury relevant to issues arising upon the pleadings, that he 'state separately' his conclusions of law. The present case indicates the inconsistency and confusion that may arise when the trial judge unnecessarily frames and answers issues In addition to finding specific facts and stating his conclusions of law with reference thereto. The court's affirmative answers to the first and second issues, if given legal significance, were findings (1) that the parties entered into the Written contract of 24 October 1969, and (2) that defendants breached that contract. There was no controversy with reference to whether the written contract of 24 October 1969 was entered into by the parties thereto. Too, there was no allegation, evidence or contention that defendants had breached any of the provisions of That contract. The answers to these issues afforded to basis for any recovery by plaintiff. They do not relate to the real issue involved herein, that is, whether the plaintiff is entitled to recover for alleged breach of implied warranty. Hence, we disregard the issues and answers thereto and consider the case on the basis of the pleadings, the evidence, the court's specific findings of fact and conclusions of law, and the judgment.

We note that the evidence does not support plaintiff's allegations in the following respects: There is no evidence that defendant Expressly warranted 'that the whole house was insulated' or 'that the walls had been adequately waterproofed' or 'that the cement floor in the basement was of sufficient quality material and workmanship as to prevent any leakage that otherwise might occur.' There was no evidence of any express warranty or that any warranty was 'made knowingly, intentionally, and fraudulently as an inducement to the trade, and in reliance upon which the plaintiff entered into the agreement, and without which reliance no trade would have been made.' Moreover, there is no evidence pertaining to any lack of insulation of 'the whole house.' Nor does the evidence attribute the presence of water in the basement to lack 'of sufficient quality material and workmanship' in respect of 'the cement floor in the basement.'

In particularizing his allegations, plaintiff alleged that the leakage around the base of the basement walls, which occurred shortly after he took possession, was caused by lack of competent workmanship and insufficiency of materials used in waterproofing the walls. He referred to an attempt by defendants on or about 22 or 23 October 1971 to remedy this condition; and he attributed this condition to the backing of the water into his basement from an inadequate storm sewer pipe, alleging that '(t)he inadequacy of the storm sewer pipe was well known to defendants, or should have been, inasmuch as the selection of the system had been at the instance and for the use and benefit of defendants.'

There was no evidence of any condition existing on or about 22 or 23 October 1971 that defendant attempted to remedy. The uncontroverted evidence tends to show, and the court found as facts, that in January and February 1970 extensive repairs were made by defendant Ballou to waterproof the basement at a cost to him of approximately $4,000.00; and that, after Ballou had done this work, the basement remained dry for approximately eighteen months.

Although we call attention to these variances between the allegations of the complaint and the evidence upon which plaintiff now seeks to recover, it would seem that under Rule 15(b) the complaint should be deemed amended to conform to the proof. Mangum v. Surles, 281 N.C. 91, 187 S.E.2d 697 (1972), and cases cited. However, these variances between allegations and proof tended to obscure the determinative factual issues and the proper basis for determining that damages, if any, plaintiff was entitled to recover. As stated by Justice Branch in Roberts v. Memorial Park, 281 N.C. 48, 59, 187 S.E.2d 721, 727 (1972): '(T)he better practice dictates that even where pleadings are deemed amended under the theory of 'litigation by consent,' the party receiving the benefit of the rule should move for leave of court to amend, so that the pleadings will actually reflect the theory of recovery.'

If plaintiff is entitled to recover, his recovery must be based upon Breach of implied warranty. Hence, our first question is whether there was an implied warranty; and, if so, the nature and extent thereof.

Absent evidence of an express warranty, or of misrepresentation, or of any effort to divert plaintiff from a full and complete investigation, defendant relies upon Caveat emptor as a legal defense to plaintiff's right to recover.

In numerous recent decisions involving the sale of a recently constructed house by a builder-vendor to the initial purchaser thereof, the rule of Caveat emptor has been substantially relaxed. See Annot., Liability of Builder-Vendor or other Vendor of New Dwelling for Loss, Injury, or Damage Occasioend by Defective Condition Thereof, 25 A.L.R.3d 383 (1969), and supplemental decisions. In such a factual situation twenty-six states have adopted some form of implied warranty. As an exception to the rule of Caveat emptor, some courts, in accordance with English precedents, hold 'that where a house is purchased during the course of construction there is an implied warranty by the builder-vendor that it will be completed in a workmanlike manner, although continuing to take the view that there is no implied warranty with respect to the purchase of a completed house.' See 25 A.L.R.3d at 415. In our view, whether there is an implied warranty does not depend upon whether the house has been completed or whether it is in some stage of construction at the time the contract for the sale and purchase thereof is made. An implied warranty cannot be held to extend to defects which are visible or should be visible to a reasonable man upon inspection of the dwelling. See, e.g., Driver v. Snow, 245 N.C. 223, 225, 95 S.E.2d 519, 520--521 (1956); Hudgins v. Perry, 29 N.C. 102, 104--105 (1846). Cf. N.C. Gen. Stat. § 25--2--316(3)(b) which provides that 'when the buyer before entering into the contract has examined the goods or the sample or model as fully as he desired or has refused to examine the goods there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to him. . . .' The determinative question here is whether the purchaser, prior to the passing of the deed or the taking of possession (whichever first occurs), had notice of the alleged defects without regard to whether such notice was obtained while the house was under construction or after the completion thereof.

On 24 October 1969, when they contracted to purchase the subject property, and thereafter until 4 December 1969 when the transaction was completed, plaintiff and his wife were free to inspect and did inspect the subject property, particularly the recently constructed dwelling thereon. Nothing had occurred or was then observable either by plaintiff or defendant bearing upon whether the waterproofing was sufficient to protect the basement area from seepage or flooding. Nothing in the evidence suggests that plaintiff was aware of any insufficiency in respect of waterproofing or that such insufficiency could be observed or determined by him upon his reasonable inspection of the completed dwelling. We note here that there was no evidence or contention that any portion of the house other than the basement was defective in any respect.

Absent evidence of an express warranty, or of misrepresentation, or of any effort to divert plaintiff from a full and complete investigation, defendant's obligation to plaintiff was determinable on legal principles stated in Moss v. Knitting Mills, 190 N.C. 644, 648, 130 S.E. 635, 637 (1925), as follows: 'It is the duty of the builder to perform his work in a proper and workmanlike manner (citations omitted). This means that the work shall be done in an...