Jeanguneat v. Jackie Hames Const. Co.

• Decision Date: 14 March 1978
• Docket Number: No. 49901,49901
• Citation: 576 P.2d 761
• Parties: Kenneth H. JEANGUNEAT and Barbara D. Jeanguneat, Appellees, v. JACKIE HAMES CONSTRUCTION COMPANY, Appellant.
• Court: Oklahoma Supreme Court

Page 761

576 P.2d 761

Kenneth H. JEANGUNEAT and Barbara D. Jeanguneat, Appellees, v. JACKIE HAMES CONSTRUCTION COMPANY, Appellant.

No. 49901.

Supreme Court of Oklahoma.

March 14, 1978.

Appeal from the District Court of Grady County; Donald H. Horn, Trial Judge.

This case involves an appeal from a judgment against a home builder-vendor entered in a civil suit based upon the breach of implied warranty of habitability, initiated by a husband and wife who had purchased a new home from the builder-vendor. AFFIRMED.

B. Jack Taylor, Chickasha, for appellees.

James B. Blevins, Blevins & York, Oklahoma City, for appellant.

DAVISON, Justice.

This case involves an appeal from a judgment against a home builder-vendor ¹ ; Jackie Hames Construction Company, entered in a civil suit commenced by Kenneth and Barbara Jeanguneat, purchasers of a new home from the construction company. The Jeanguneat's suit was based upon a breach of an implied warranty that their new home was suitable for human habitation.

Within three weeks of moving into their new home, the Jeanguneats discovered that their well water was not suitable for domestic use. In fact, an analysis of the water by the State Health Department revealed that the amount of suspended solids in the water, turbidity, made the water unacceptable for human consumption. A State Health Department official testified that according to standards set by the State, water with a turbidity value of more than five was not considered acceptable for human consumption, and that the Jeanguneat's water far exceeded that upper limit, their water having a turbidity value of twenty-eight. Alleging that defects in the well furnished by the builder-vendor prevented the normal use and enjoyment of their property, the Jeanguneats sought to be compensated for damage to their personal property caused by the excessive sand and soil in the well water, and for the costs they incurred in drilling a new well. At the conclusion of the non-jury trial, the trial court entered judgment for the Jeanguneats for $1,366.00, together with interests and costs.

In attacking the judgment on appeal, appellant, builder-vendor, asserts that under the laws of Oklahoma there is no implied warranty of fitness in the sale of a completed home; that the doctrine of caveat emptor controls, and that even if such an implied warranty exists under the law, the facts in this case render the employment of such a warranty inapplicable. Secondly, appellant asserts that evidence as to specific items of damage was insufficient, and that appellant's demurrer to the evidence, on specific items of damage, should have been sustained.

We first address the issue of an implied warranty of fitness for occupancy in the sale of a completed home by the builder-vendor. In Jones v. Gatewood, Okl., 381 P.2d 158 (1963), this Court found that the seller of a house which is being constructed and which, at the time of sale, is not ready for occupancy as a finished house, impliedly warrant that when the house is completed, it will be completed in a workmanlike manner and reasonably fit for occupancy as a place of abode, in the absence of an agreement to the contrary. In reaching that result, we stated, quoting from Miller v. Cannon, Hill Estates, Ltd., 2 K.B. 113 (1931).

" ' * * * The position is quite different when you contract with a builder or with the owners of a building estate in course of development that they shall build a house for you or that you shall buy a house which is then in the course of erection by them. There the whole object, as both parties know, is that there shall be erected a house in which the intended purchaser shall come to live. It is the very nature and essence of the transaction between the parties that he will have a house put up there which is fit for him to come into as a dwelling-house. It is plain that in those circumstances there is an implication of law that the house shall be reasonably fit for the purpose for which it is required, that is for human dwelling. * * * ' "

Appellant attempts to distinguish the case before us from Jones v. Gatewood, supra, by arguing that the implied warranty found to exist in Gatewood was on the sale of an incomplete home, and that in the case before us, no such warranty existed, as the home being sold was completed. In Carpenter v. Donohoe, 154 Colo. 78, 388 P.2d 399, 402, the Supreme Court of Colorado stated:

"That a different rule should apply to the purchaser of a house which is near completion than would apply to one who purchases a new house seems incongruous. To say that the former may rely on an implied warranty and the latter cannot is recognizing a distinction without a reasonable basis for it."

Like the Colorado Supreme Court, we see no reasonable basis for the application of different rules based upon whether the new home being purchased in a particular case is completed or incomplete.

In the late 1960s, the Supreme Court of Texas in Humber v. Morton, Tex., 426 S.W.2d 544, 562 (1968) stated:

"The caveat emptor rule as applied to new houses is an anachronism patently out of harmony with modern home buying practices. It does a disservice not only to the ordinary prudent purchaser but to the industry itself by lending encouragement to the unscrupulous, fly-by-night operator and purveyor of shoddy work."

In Schipper v. Levitt & Sons, 44 N.J. 70, 207 A.2d 314, 326 (1965), the Supreme Court of New Jersey stated:

" * * * (the) contention that caveat emptor should be applied and the deed viewed as embodying all the rights and responsibilities of the parties disregards the realities of the situation. Caveat emptor developed when the buyer and (the) seller were in an equal bargaining position and they could readily be expected to protect themselves in the deed. Buyers of mass produced development homes are not on an equal footing with the builder vendors and are no more able to protect themselves in the deed than are automobile purchasers in a position to protect themselves in the bill of sale." (Emphasis added)

In Bethlahmy v. Bechtel, 91 Idaho 55, 415 P.2d 698, 710 (1966), the Supreme Court of Idaho, in discussing implied warranties in the purchase of new homes, stated:

" * * * The old rule of caveat emptor does not satisfy the demands of justice in such cases. The purchase of a home is not an everyday transaction for the average family, and in many instances is the most important transaction of a lifetime. To apply the rule of caveat emptor to an inexperienced buyer, and in favor of a builder who is daily engaged in the business of building and selling houses, is manifestly a denial of justice. * * *

The implied warranty of fitness does not impose upon the builder an obligation to deliver a perfect house. No house is built without defects, and defects susceptible of remedy ordinarily would not warrant rescission. But major defects which render the house unfit for habitation, and which are not readily remediable, entitle the buyer to rescission and restitution. * * * "

In Waggoner v. Midwestern Development, Inc., 83 S.D. 57, 154 N.W.2d 803, 809 (1967), the Supreme Court of South Dakota stated:

"We conclude that where in the sale of a new house the vendor is also a builder of houses for sale there is an implied warranty of reasonable workmanship and habitability surviving the delivery of deed. The builder is not required to construct a perfect house and in determining whether a house is defective the test is reasonablness (sic) and not perfection. Schipper v. Levitt & Sons, Inc., supra. The duration of liability is likewise determined by the standard of reasonableness."

As we are persuaded by the rationale in the above discussed cases, we hold that when a builder-vendor sells a new home, he or she impliedly warrants that the new home is or will be completed in a workmanlike manner and is or will be reasonably fit for occupancy as a place of abode, in the absence of an agreement to the contrary, and that such an implied warranty exists, as a matter of law, both when the new home being sold is completely constructed, and when, at the time of sale, the house is being constructed or...