Humber v. Morton

Decision Date27 March 1968
Docket NumberNo. B--352,B--352
Citation426 S.W.2d 554,25 A.L.R.3d 372
PartiesErnestine HUMBER, Petitioner, v. Claude MORTON, Respondent.
CourtTexas Supreme Court

Jerry R. Hollingsworth, Amarillo, for petitioner.

Underwood, Wilson, Sutton, Heare & Berry, Harlow Sprouse, Amarillo, for respondent.

NORVELL, Justice.

The widow Humber brought suit against Claude Morton, alleging that Morton was in the business of building and selling new houses; that she purchased a house from him which was not suitable for human habitation in that the fireplace and chimney were not properly constructed and because of such defect, the house caught fire and partially burned the first time a fire was lighted in the fireplace. Morton defended upon two grounds: that an independent contractor, Johnny F. Mays, had constructed the fireplace and he, Morton, was not liable for the work done by Mays, and that the doctrine of 'caveat emptor' applied to all sales of real estate. Upon the first trial of the case (which was to a jury), Mrs. Humber recovered a judgment which was reversed by the Eastland Court of Civil Appeals and the cause remanded for another trial because of an improper submission of the damage issue. 399 S.W.2d 831 (1966, no writ). 1

Upon the second trial, defendant Morton filed a motion for summary judgment supported by affidavits, one of which referred to and incorporated therein the statement of the evidence adduced upon the first trial. Plaintiff likewise made a motion for summary judgment. Defendant's motion was granted and that of the plaintiff overruled. Such judgment was affirmed by the Court of Civil Appeals upon the holdings that Mays was an independent contractor and that the doctrine of implied warranty was not applicable to the case. 414 S.W.2d 765. Mrs. Humber, as petitioner, brought the case here, but we shall refer to the parties by their trial court designations.

It conclusively appears that defendant Morton was a 'builder-vendor.' The summary judgment proofs disclose that he was in the business of building or assembling houses designed for dwelling purposes upon land owned by him. He would then sell the completed houses together with the tracts of land upon which they were situated to members of the house-buying public. There is conflict in the summary judgment proofs as to whether the house sold to Mrs. Humber had been constructed with a dangerously defective fireplace chimney. Construction engineers who testified under oath for Mrs. Humber, as disclosed by the statement of facts upon the first trial which was made a part of the summary judgment record here, stated that the chimney was defective. Mr. Mays, who built the chimney, denied that his work was substandard or deficient in any way.

While there may be other grounds for holding that Mrs. Humber made a case to go to the jury, such as negligence attributable to Morton, failure to inspect and the like, we need not discuss these theories because we are of the opinion that the courts below erred in holding as a matter of law that Morton was not liable to Mrs. Humber because the doctrine of caveat emptor applied to the sale of a new house by a 'builder-vendor' and consequently no implied warranty that the house was fit for human habitation arose from the sale. Accordingly, we reverse the judgments of the courts below and remand the cause to the district court for a conventional trial upon the merits.

Mrs. Humber entered into a contract when she bought the house from Morton in May of 1964 and such house, together with the lot upon which it was situated, was conveyed to her. According to Morton, the only warranty contained in the deed was the warranty of title, i.e. 'to warrant and forever defend, all and singular, the said premises unto the said Ernestine Humber, her heirs and assigns, * * *,' and that he made no other warranty, written or oral, in connection with the sale. While it is unusual for one to sell a house without saying something good about it, and the statement that no warranty was made smacks of a conclusion, we shall assume that such conversation as may have taken place did not involve anything more than mere sales talk or puffing, and that no express warranties, either oral or written, were involved. However, it is undisputed that Morton built the house and then sold it as a new house. Did he thereby impliedly warrant that such house was constructed in a good workmanlike manner and was suitable for human habitation? We hold that he did. Under such circumstances, the law raises an implied warranty.

Preliminary to our discussion of the controlling issue in the case, the applicability of the caveat emptor doctrine, we should notice the reference of the Court of Civil Appeals to Article 1297, Vernon's Ann.Tex.Stats., which incidentally is not set out in the opinion, but is referred to by a quotation from Westwood Development Company v. Esponge, 342 S.W.2d 623 (Tex.Civ.App.1961, writ ref'd, n.r.e.). The statute is not deemed applicable here for a number of reasons. Article 1297 does not say that warranties as to fitness and suitability of structures upon land cannot arise unless expressed in the deed of conveyance. The article relates to covenants which may or may not arise from the use of certain specific words in a conveyance, namely, 'grant' or 'convey.' 2

This article is part of Title 31, Revised Statutes, relating to conveyances. It relates to covenants of title which arise out of conveyances and not to collateral covenants such as the suitability of a house for human habitation. The presence of a collateral covenant of this type in a deed would be strange indeed. 'It is not the office of a deed to express the terms of the contract of sale, but to pass the title pursuant to the contract.' 26 C.J.S. Deeds § 1, p. 582. The article simply prescribes what covenants may be implied by the use of two designated words, 'grant' or 'convey.' The implied warranty of fitness arises from the sale and does not spring from the conveyance.

It may be that the lower courts were striking at the nonstatutory doctrine of merger under which all prior negotiations with reference to a sale of land are said to be merged in the final transaction between the parties. The doctrine of merger, however, is a matter generally controlled by the intention of the parties. 26 C.J.S. Deeds § 91, p. 841. For example: A owns Blackacre and agrees with B to construct a house thereon and then conveys the house and lot to B after the house has been completed. There are numerous cases that an implied covenant or warranty to build in a workmanlike manner is not destroyed by the deed. See, e.g., Perry v. Sharon Development Co. (1937) 4 All E.R. 390 (CA); Jones v. Gatewood, 381 P.2d 158 (Okl.1963).

If the passage of a deed does not operate to extinguish a warranty, either expressed or implied, in the case of an uncompleted house, it is difficult to understand how the deed could operate to merge and thus destroy an implied warranty raised by law in the case of a sale of a completed new house. It would be a strange doctrine indeed for the law to raise an implied warranty from a sale and then recognize that such warranty could be defeated by the passage of title to the subject matter of the sale. The issue here is not whether the implied warranty was extinguished by a conveyance, but whether such warranty ever came into existence in the first place.

The cases which give some weight to the doctrine of merger in the implied warranty situation hold that the doctrine of caveat emptor applies to sales of real property, thus reducing the 'merger' theory to the status of a 'unicorn hunting bow.' 3 The merger doctrine implies that there is something to merge.

It might further be pointed out that generally in Texas, the notion of implied warranty arising from sales is considered to be a tort rather than a contract concept. Decker & Sons v. Capp, 139 Tex. 609, 164 S.W.2d 828, 142 A.L.R. 1479 (1942); Putman v. Erie City Mfg. Co., 338 F.2d 911 (5th Cir.1964). As to warranties implied from contracts and strict liability in tort, see, Epstein, 'Strict Liability in Tort--A modest Proposal,' 70 W.Va.L.Rev. 1 (1967).

We return to the crucial issue in the case--Does the doctrine of caveat emptor apply to the sale of a new house by a builder-vendor?

Originally, the two great systems of jurisprudence applied different doctrines to sales of both real and personal property. The rule of the common law--caveat emptor--was fundamentally based upon the premise that the buyer and seller dealt at arm's length, and that the purchaser had means and opportunity to gain information concerning the subject matter of the sale which were equal to those of the seller. On the other hand, the civil law doctrine--caveat venditor--was based upon the premise that a sound price calls for a sound article; that when one sells an article, he implies that it has value. 77 C.J.S. 1159, Sales § 315, Sales 275, Sales, 46 Am.Jur. 275, Sales § 87.

Today, the doctrine of caveat emptor as related to sales of personal property has a severely limited application. Decker & Sons v. Capp, supra; McKisson v. Sales Affiliates, 416 S.W.2d 787 (Tex.Sup.1967); Putman v. Erie City Mfg. Co., supra; O. M. Franklin Serum Co. v. C. A. Hoover & Sons, 418 S.W.2d 482 (Tex.Sup.1967).

In 1884, the Supreme Court of the United States applied the doctrine of implied warranty, the antithesis of caveat emptor, to a real property situation involving false work and pilings driven into the bed of the Maumee River. The case of Kellogg Bridge Company v. Hamilton, 110 U.S. 108, 3 S.Ct. 537, 28 L.Ed. 86, arose in connection with the construction of a bridge. The Supreme Court, (the elder Mr. Justice Harlan writing), said:

'Although the plaintiff in error (Kellogg Bridge Company, defendant in the trial court) is not a manufacturer, in the common acceptation of that word, it made or constructed the false work which it sold to...

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