House v. Thornton, 40197
| Decision Date | 17 July 1969 |
| Docket Number | No. 40197,40197 |
| Citation | 76 Wn.2d 428,457 P.2d 199 |
| Court | Washington Supreme Court |
| Parties | Homer R. HOUSE and Noreen M. House, his wife, Respondents, v. Ray THORNTON and Muriel Thornton, his wife; and Nyal W. Headley and Jane Doe Headley, his wife, doing business as Windemere Real Estate Company, Appellants. |
John L. Vogel, Seattle, for appellants.
Clinton, Moats, Andersen & Fleck, Gordon S. Clinton, Seattle, for respondents.
Fraud is so easy to claim that the law makes it hard to prove. When the basement, walls, floors and foundation of a house plaintiffs had bought from defendants slipped and cracked and the supporting terrain slid away from the foundation, plaintiffs brought this suit to rescind the sale. Plaintiffs Homer and Noreen House charged the sellers with overt false misrepresentations and deceit but the court granted the rescission although expressly finding that these allegations were not clearly, cogently and convincingly proved. Defendant sellers appeal, and we perceive the major issue to be whether, in the sale of a brand-new house to its first buyer and occupant, the law impresses the transaction with a warranty that the foundation is firm and secure.
Defendant Headley, a real-estate broker, in 1961, bought lots 7, 8 and 9 in block 3, on 57th Avenue Northeast in Seattle. He built and sold a house on lot 7, kept lot 8, and arranged with his building contractor, defendant Ray Thornton, to build and sell a house on lot 9 to a young doctor who subsequently withdrew from the deal. Before buying the lots, Headley had discovered on lot 9 the foundation of a house that had once been there. The vendor told him that the house had been removed from the lot because septic tanks on adjacent higher ground had drained onto it, and the drainage from them had impaired the stability of the earth there. The owner also told him that the removed house and the remaining foundation had been improperly constructed and the lot improperly drained, but that the lot had never been filled and that the area had never been considered a slide area.
Headley checked with the city engineer's office, found that the land on lot 9, although on a fairly steep slope, was considered to be stabilized; that there had been no contrary indication for 15 years; and that the septic tanks once thought to have been the source of the slides were now disconnected and a city sewer installed in their stead. According to Headley's builder, Thornton, the old foundation had been an amateurish job of construction with improper and inadequate use of steel and badly poured concrete, and was altogether unsuitable for hillside construction. Discovery of the foundation thus did not amount to warning or indication that the lot and subsoil would prove to be unstable for a new foundation properly designed and built.
Defendant Headley and his contracting builder entered into a copartnership and agreement to construct a residence on lot 9 for a young doctor who agreed to purchase it. After construction had been well under way, the prospective purchaser withdrew from the transaction on the basis that his immediate future income potential did not warrant so great an investment. Nevertheless, the defendants proceeded with their plans to finish the residence and to advertise it for sale.
Homer and Noreen House, plaintiffs, first saw the house in August, 1964. At the time, it was virtually complete and the upstairs was ready for occupancy but some partitions and plasterboard had yet to be installed in the basement. Landscaping was largely uncompleted. Plaintiffs noticed ruts and crevices in the rockery and ditches in the backyard apparently caused by erosion. A few weeks later, in September, 1964, they bought the house and lot 9 plus an adjoining 10 feet on lot 10 for $32,583.38, making a down payment of $12,583.38 and financing the $20,000 balance through a mortgage with the University Federal Savings and Loan Association.
About 3 months later, in December, 1964, following a period of heavy rains, the Houses observed a three-eighths inch crack open up in the earth outside of but running the length of and parallel to the east wall of the house and on into the adjacent lot. Water accumulated in the yard, and Mr. House, on the advice of Mr. Thornton, the builder, dug a trench to drain it. In digging this trench, Mr. House first discovered the existence of the old foundation.
During the following winter, 1965, another crack in the yard opened up and Mr. House dug another trench to drain the water away from it and found that the earth beneath it settled for about 3 inches near the north end of the house. Then the steps and basement wall separated, and the seam between the chimney and house opened so that daylight showed through it into the living room. Earth supporting the end of the concrete patio dropped 4 to 6 inches and the walkway to the patio separated 4 to 5 inches for a distance of 20 feet. Mr. Thornton brought in a machine, cracked up and removed the patio, and discovered that the east wall of the basement had bulged. A crack developed in the basement floor running up into a section of the concrete basement wall. The floor of the basement dropped about 6 inches and another crack opened up in the basement wall.
Nearly all of the doors in the house settled and had to be planed but finally the shifting of the house made the planing futile. Cracks developed in the plasterboard of the kitchen, hallway, stairwell and bedroom. Thornton, the builder, treated the yard soil and rockery with plastic sheeting to reduce moisture content of the subsoil, separated the drain tile from the downspouts, and connected fire hose to lead the water away from the basement.
But the crack in the yard running parallel to the east side of the house widened to 4 to 6 inches and deepened to nearly 3 feet in places. Cracks in the basement walls continued to widen and deepen, and at one place near a basement window a wide, jagged, open crack appeared which would leave doubts that the house was safe for occupancy. Pictures of the place showed long, jagged cracks in the yard, and the earth sluffing away from under the foundation. Cracks appeared in the concrete basement walls which formed part of the foundation. There was little doubt among the parties that, after 23 months of occupancy and continuous efforts to remedy the slipping and cracking, the house was untenable and unfit for further occupancy as a dwelling.
Plaintiffs brought this suit for rescission. The trial court granted a decree rescinding the sale on tender of a deed by plaintiffs to the defendants, awarded plaintiffs judgment in the sum of $11,685.69, and ordered the defendants to hold plaintiffs harmless from any further liability on the mortgage. In allowing plaintiffs rescission and arriving at damages of $11,685.69 for moneys paid in and expended by them, the court deducted from their award a reasonable rental for their occupancy fixed at $200 per month for 39 months, or a total reduction in the judgment of $7,800.
Plaintiffs, as earlier stated, brought this suit for rescission on the basis of deceit and misrepresentation concerning the stability of the house, lot and surrounding terrain. They testified that the appearance of the lot and slope on which the house rested and the appearance of the higher surrounding terrain and that of the rockery and patio prompted them to make inquiries of the defendant sellers before completing the purchase as to the security of the lot. They said the defendants assured them that there would be no problems as to the hill on which the house stood, that sewers had been installed to replace the old septic tanks in the area, and that, if there had been any problems of slides, the trees in the vicinity would have shown it. Defendants, they said, pointed to some standing trees and piling, all completely erect, which they said would have been leaning had there been slippage.
The vendor-builders made no reference to the removal of a house from lot 9 nor that its foundation remained there, and the plaintiff-buyers were unaware of either. Plaintiffs did not learn of the removal of the house nor its remaining foundation until long after they had moved in and had attempted to drain the lot. Plaintiffs thus based their suit for...
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