Lemle v. Breeden, 4772

• Citation: 51 Haw. 426,462 P.2d 470
• Decision Date: 26 November 1969
• Docket Number: No. 4772,4772
• Parties: , 51 Haw. 478, 40 A.L.R.3d 637 Henry C. LEMLE v. Mrs. V. E. BREEDEN.
• Court: Supreme Court of Hawai'i

Page 470

462 P.2d 470

51 Haw. 426, 51 Haw. 478, 40 A.L.R.3d 637

Henry C. LEMLE v. Mrs. V. E. BREEDEN.

No. 4772.

Supreme Court of Hawai'i.

Nov. 26, 1969.

Rehearing Denied Dec. 17, 1969.

Syllabus by the Court

1. The application of an implied warranty of habitability and fitness in leases of dwellings recognizes changes in the history of leasing transactions, takes into account contemporary housing realities, and affirms the fact that a lease is, in essence, a contractual relationship from which the warranty of habitability and fitness is a just and necessary implication.

2. The doctrine of constructive eviction, as an admitted judicial fiction designed to operate as though there were a substantial breach of a material covenant in a bilateral contract, no longer serves its function when the more flexible concept of implied warranty of habitability and fitness is legally available.

3. By adopting the view that a lease is essentially a contractual relationship with an implied warranty of habitability and fitness, a more consistent and responsive set of remedies are available for a tenant which gives him a wide range of alternatives in seeking to resolve a dispute with his landlord.

W. Patrick O'Connor, Honolulu (A. William Barlow, Honolulu, on the briefs), for defendant-appellant.

Robert A. Franklin, Honolulu, for plaintiff-respondent.

Before RICHARDSON, C. J., and MARUMOTO, ABE, LEVINSON and KOBAYASHI, JJ.

LEVINSON, Justice.

This case of first impression in Hawaii involves the doctrine of implied warranty of habitability and fitness for use of a leased dwelling. The plaintiff-lessee (Lemle) sued to recover the deposit and rent payment totalling $1,190.00. Constructive eviction and breach of an implied warranty of habitability and fitness for use were alleged as the basis for recovery. The defendant-lessor (Mrs. Breeden) counterclaimed for damages for breach of the rental agreement. The trial court, sitting without a jury, held for the plaintiff and the case comes to us on appeal from that judgment.

The facts in this case are relatively simple and without substantial conflict. The rented premises involved are owned by the defendant, Mrs. Breeden, and are located in the Diamond Head area of Honolulu. The house fronts on the water with the surrounding grounds attractively landscaped with lauhala trees and other shrubbery. The dwelling consists of several structures containing six bedrooms, six baths, a living room, kitchen, dining room, garage, and salt water swimming pool. The main dwelling house is constructed in 'Tahitian' style with a corrugated metal roof over which coconut leaves have been woven together to give it a 'grass shack' effect. The house is relatively open without screening on windows or doorways.

The defendant herself occupied the premises until sometime between September 14 and September 17, 1964, when she returned to the continental United States, having authorized a local realtor to rent the house for her. On September 21, 1964 during the daylight hours, the realtor showed the home to the plaintiff and his wife, newcomers to Hawaii from New York City, and told them that it was available for immediate occupancy. The plaintiff saw no evidence of rodent infestation during the one-half hour inspection.

The evening the rental agreement was executed. It was for the periods September 22, 1964 to March 20, 1965, and April 17, 1965 to June 12, 1965. The rental was $800.00 per month fully furnished. Mrs. Breeden reserved the right to occupy the premises between March 20 and April 17, 1965. The plaintiff tendered a check to the defendant's agent for $1,190.00 at that time.

The very next day, September 22, 1964, the plaintiff, his wife and their four children, who had been staying in a Waikiki hotel, took possession of the premises. That evening it became abundantly evident to the plaintiff that there were rats within the main dwelling and on the corrugated iron roof. It was not clear whether the rats came from within the house or from the rocky area next to the water. During that night and for the next two nights the plaintiff and his family were sufficiently apprehensive of the rats that they slept together in the downstairs living room of the main house, thereby vacating their individual bedrooms. Rats were seen and heard during those three nights.

On September 23, 1964, the day after occupancy, the defendant's agent was informed of the rats' presence and she procured extermination services from a local firm. The plaintiff himself also bought traps to supplement the traps and bait set by the exterminators. These attempts to alleviate the rat problem were only partially successful and the succeeding two nights were equally sleepless and uncomfortable for the family.

On September 25, 1964, three days after occupying the dwelling, the plaintiff and his family vacated the premises after notifying the defendant's agent of his intention to do so and demanding the return of the money which he had previously paid. Subsequently this suit was brought.

The trial judge ruled that there was an implied warranty of habitability and fitness in the lease of a dwelling house, that there was a breach of warranty, that the plaintiff was constructively evicted, and that the plaintiff was entitled to recover $1,110.00 plus interest.

We affirm.

A. THE IMPLIED WARRANTY OF HABITABILITY AND FITNESS OF LEASED PREMISES.

It is important in a case of this type to separate carefully two very distinct doctrines: (1) that of implied warranty of habitability and fitness for the use intended, and (2) that of constructive eviction. The origin, history, and theoretical justification for these legal doctrines are quite different and are not to be confused.

At common law when land was leased to a tenant, the law of property regarded the lease as equivalent to a sale of the premises for a term. The lessee acquired an estate in land and became both owner and occupier for that term subject to the ancient doctrine of caveat emptor. Since rules of property law solidified before the development of mutually dependent ocvenants in contract law, theoretically once an estate was leased, there were no further unexecuted acts to be performed by the landlord and there could be no failure of consideration. 6 Williston, Contracts § 890 (3d ed. 1962). Predictably enough, this concept of the lessee's interest has led to many troublesome rules of law which have endured far beyond their historical justifications. See Lesar, 'Landlord and Tenant Reform', 35 N.Y.U.L.Rev. 1279 (1960).

Given the finality of a lease transaction and the legal effect of caveat emptor which placed the burden of inspection on the tenant, the actual moment of the conveyance was subject to an untoward amount of legal focus. Only if there were fraud or mistake in the initial transaction would the lessee have a remedy. '(F)raud apart, there is no law against letting a tumble-down house.' Robbins v. Jones, 15 C.B.N.S. 221, 240, 143 Engl.Rep. 768, 776 (1863). In the absence of statute it was generally held that there was no implied warranty of habitability and fitness. 1 American Law of Property § 3.45 (Casner ed. 1952); 2 R. Powell, The Law of Real Property § 225(2) (Rohan ed. 1967); Lawler v. Capital City Life Insurance, 62 App.D.C. 391, 68 F.2d 438 (1933).

The rule of caveat emptor in lease transactions at one time may have had some basis in social practice as well as in historical doctrine. At common law leases were customarily lengthy documents embodying the full expectations of the parties. There was generally equal knowledge of the condition of the land by both landlord and tenant. The land itself would often yield the rents and the buildings were constructed simply, without modern conveniences like wiring or plumbing. Yet in an urban society where the vast majority of tenants do not reap the rent directly from the land but bargain primarily for the right to enjoy the premises for living purposes, often signing standardized leases as in this case, common law conceptions of a lease and the tenant's liability for rent are no longer viable. As one authority in the field of Landlord-Tenant law has said:

Obviously, the ordinary lease is in part a bilateral contract, and it is so regarded by the civil law. There is no reason why it could not be recognized for what it is, both a conveyance and a contract. But the doctrine that a lease is a conveyance and the rules based thereon were established before the development of the concept of mutual dependency in contracts, and the Anglo-American courts have been slow to apply the doctrine to the contractual provisions of leases. Lesar, supra at 1281.

American and English courts have attempted to circumvent this historical rigidity by the use of the doctrine of constructive eviction which serves as a substitute for the dependency of covenants in a large class of cases involving the enjoyment of the premises. Furthermore, limited exceptions to the general rule of no implied warranty of habitability and fitness are also widely recognized. The exception raised in this case applies when a furnished dwelling is rented for a short period of time. Ingalls v. Hobbs, 156 Mass. 348, 31 N.E. 286, 16 L.R.A. 51 (1892); Young v. Povich, 121 Me. 141, 116 A. 26, 29 A.L.R. 48 (1922); 1 American Law of Property § 3.45 at 268 (Casner ed. 1952). This exception has been justified on the ground that there is no opportunity to inspect, therefore the rule of caveat emptor does not apply. Nevertheless, some courts have strictly construed this exception limiting it to only 'temporary' rentals, defects existing at the time of rental, and defects in furnishings. Murray v. Albertson, 50 N.J.L. 167, 13 A. 394 (1888); Davenport v. Squibb, 320 Mass. 629, 632-633, 70 N.E.2d 793, 795 (1947).

While the inability to inspect is the avowed justification for the exception, it is more soundly supported by the obvious fact that the tenant is implicitly or...