Laurel Realty Co. v. Himelfarb

• Decision Date: 10 March 1950
• Docket Number: 109.
• Citation: 72 A.2d 23,194 Md. 672
• Parties: LAUREL REALTY CO. v. HIMELFARB et ux.
• Court: Maryland Court of Appeals

72 A.2d 23

194 Md. 672

LAUREL REALTY CO. v. HIMELFARB et ux.

No. 109.

Court of Appeals of Maryland.

March 10, 1950

Hilary W. Gans and Albert F. Wheltle, both of Baltimore for appellant.

Morris Rosenberg and Henry M. Decker, Jr., both of Baltimore, for appellees.

Before MARBURY Chief Judge, and DELAPLAINE, COLLINS, GRASON, and HENDERSON JJ.

HENDERSON, Judge.

This appeal is from a decree of the Circuit Court of Baltimore City awarding damages of $575 for breach of a contract relating to the construction and sale of a house. The bill was for specific performance, or in the alternative for damages. In a former appeal we sustained an order overruling a demurrer to the amended bill. Laurel Realty Co. v. Himelfarb, Md., 62 A.2d 263, 267. We held that the written contract filed with the bill on its face was not complete, and could properly be supplemented by proof of the oral agreements alleged in the bill; that the contract was not within the Statute of Frauds; and that the acceptance of the deed and payment of the purchase price did not effect a merger of the oral agreements and render them null and void under the facts alleged, especially in view of the allegation that the appellees were denied an opportunity for inspection.

We said further 'It does not, however, follow that they can now compel the appellant to do all of the things which are required by the specifications. Some of the things left undone may have been visible from the outside, and as to these they will be held to have been waived when appellees accepted the deed. As to others, it may be impossible now to reconstruct the house, especially as to relaying floors, and the only reasonable remedy will be to provide compensation in the form of money damages. However, all of this is subject to proof, and the appellant may contend, and may be able to show, that it complied with all of the specifications. Some of the things complained of may be due to wear and tear, and others to unwise specifications. The deed was delivered on November 6, 1946, and the first bill of complaint was filed on October 28, 1947. While appellees allege that they 'seasonably and repeatedly' requested the appellant to complete the house properly, they must show that the things complained of were due to appellant's omissions, substitutions, or defective construction, and that they made demand on appellant promptly after discovery of the alleged breach of contract. Such questions of fact are for the Chancellor.'

After an extended hearing, the chancellor found that the builder was obligated to deliver a house constructed in accordance with plans and check-list specifications filed with its application to the Federal Housing Administration for priorities under the Federal Reconversion Housing Program and Priority Regulation 33 applicable to veterans' housing. He found that the purchasers had an adequate opportunity to inspect the house while under construction, and availed themselves of it. The only denial of inspection was on the day of the settlement when the floors were freshly varnished. Before the settlement the house had been inspected and approved by a representative of the Veterans' Administration. After eliminating a number of items which he held to have been waived, the Chancellor assessed damages as follows:

                 First floor joists $ 30.00
                 First floor 425.00
                 Second floor stair landing 50.00
                 Crack in living room ceiling 50.00
                 Unsanded woodwork 10.00
                 Missing handrail to cellar stairs 10.00
                 -------
                 $575.00
                

The appellant contends that the Chancellor should have dismissed the bill upon finding that there was no denial of inspection prior to the date of settlement. We do not agree. While we stressed this allegation in the previous appeal on demurrer, the decision did not rest wholly upon that allegation, as indicated by the cases cited, Buckner v. Hesson, 159 Md. 461, 150 A. 852; Levin v. Cook, 186 Md. 535, 47 A.2d 505, and Stevens v. Milestone, Md., 57 A.2d 292. The rule that the acceptance of a deed effects a merger of prior negotiations and agreements does not apply where there are collateral agreements not inconsistent with the deed, or where it appears that the execution of the deed is only a partial execution of the contract. Rosenthal v. Heft, 155 Md. 410, 418, 142 A. 598. We have expressly held there is no merger where the contract calls for the construction of a house in accordance with plans and specifications, on land to be conveyed. Edison Realty Co. v. Bauernshub, Md., 62 A.2d 354; Stevens v. Milestone, supra; Brummel v. Clifton Realty Co., 146 Md. 56, 125 A. 905. See also the cases cited in a note 84 A.L.R. 1008, 1023. The same principle was applied in Levin v. Cook, supra, where there was a conveyance of leasehold property with an express warranty as to the efficiency and good condition of a heating plant.

The mere fact that the owner takes possession after the building is erected would not in itself constitute a waiver of defects or acceptance of the contractor's workmanship. Garbis v Apatoff, Md., 63 A.2d 307, 310; Hammaker v. Schleigh, 157 Md. 652, 666, 147 A. 790, 65 A.L.R. 1285; Lohmuller Bldg. Co. v. Barrett, 146 Md. 617, 626, 127 A. 482. However, acceptance may bar recovery for known or discoverable defects. In Williston, Contracts, (Rev.Ed.) § 724, under the heading 'Acceptance of defective performance under a contract for work or construction', it is said: '* * * if the defect in the work is or ought to be known, its acceptance will impose a...