Spargnapani v. Wright, 1568.

• Decision Date: 16 December 1954
• Docket Number: No. 1568.,1568.
• Citation: 110 A.2d 82
• Parties: Adolfo SPARGNAPANI and Phyllis Spargnapani, Appellants, v. W. B. WRIGHT and G. L. Sarsfield, Appellees.
• Court: D.C. Court of Appeals

Page 82

110 A.2d 82

Adolfo SPARGNAPANI and Phyllis Spargnapani, Appellants, v. W. B. WRIGHT and G. L. Sarsfield, Appellees.

No. 1568.

Municipal Court of Appeals for the District of Columbia.

Argued November 8, 1954.

Decided December 16, 1954.

Godfrey L. Munter, Washington, D. C. with whom John Carroll Keating, Washington, D. C., was on the brief, for appellants. Godfrey L. Munter, Jr., Washington, D. C., also entered an appearance for appellants.

Harry L. Ryan, Jr., Washington, D. C., for appellee Wright.

No appearance for appellee Sarsfield.

Before CAYTON, Chief Judge, and HOOD and QUINN, Associate Judges.

CAYTON, Chief Judge.

Mr. and Mrs. Spargnapani bought a house from Sarsfield through the brokerage office of Wright. After taking possession theyf discovered that the heating plant was defective and unusable, and after unsuccessful demands for payment of repair costs sued the seller and the broker. Plaintiffs' testimony was that the broker's saleswoman had represented that the heating system was in good condition, that the oil burner was practically new and that so long as they kept oil in the tank they would have plenty of heat. The negotiations commenced in July or August, and the contract of sale was executed August 22, 1953. Their testimony (discussed in greater detail later) was that sometime in mid-October rusty water started leaking from the boiler and this leak was traced to a crack some four inches long in the top section of the boiler. There was evidence that the former owner, a Mrs. Hutchinson,¹ had caused the boiler to be "doped" with a sealing preparation, had the crack concealed by a black patch, and then had the entire boiler painted over with black paint which gave it a shiny, new appearance.

The broker's saleswoman testified that she made no representation to the Spargnapanis as to the age or working condition of the heating system, but admitted that she told them the house could be heated for a little over a hundred dollars a year, and that the walls and ceilings were insulated — this being the information she had gotten from Mrs. Hutchinson. She also admitted that she was trying to impress on them that the house could be heated very reasonably. She said she then had no knowledge of any defect in the heating system. The trial judge decided the case in favor of defendants, and plaintiffs bring this appeal.

In testing the correctness of the decision we have examined five separate findings contained in a memorandum opinion filed by the trial judge.

The first finding was that "defendants had no knowledge of the defect in the boiler." Conceding this finding to be accurate, it cannot be held decisive of the major issue, for the inescapable fact is that there was a bad defect in the boiler which had been artfully concealed. If the broker innocently represented that the heating plant was in workable condition and was mistaken in that representation, or made the representation without knowing whether it was true or false, the injured party may recover in an action for fraud. Darnell v. Darnell, 91 U.S.App. D.C. 304, 200 F.2d 747; Stein v. Treger, 86 U.S.App.D.C. 400, 182 F.2d 696; Tucker v. Beazley, D.C.Mun.App., 57 A.2d 191; Goldsten v. Burka, D.C.Mun.App., 43 A. 2d 712.

The same general principle applies to the judge's second finding that, "(2) defendants practiced no deception upon the plaintiffs with respect to the heating system, either by affirmative statements or by withholding knowledge of any concealed defects." We may assume that the broker was guilty of no deliberate deception and had no actual knowledge of the concealed defect. But on defendants' own evidence their selling agent did not disclaim such knowledge; on the contrary she represented that there was no defect when the opposite was true. The representation that the house could be heated for "a little over a hundred dollars a year" was flagrantly inaccurate, since the defect in the boiler made it impossible to heat the house at all, for any sum. "Fraud includes the pretense of knowledge when knowledge there is none." Ultramares Corp. v. Touche, 255 N.Y. 170, 174 N.E. 441, 444, 74 A.L.R. 1139. Here the broker displayed a "pretense of knowledge," conveyed to plaintiffs in the form of a representation, that if they bought the house they would be getting a functioning heating plant. Innocent though the pretended knowledge may have been, it was in fact baseless. The law does not, in such a situation, withhold its aid from one who has been led into a contract to his detriment.

The trial court also found: "(3) the plaintiffs were cognizant of the fact that they were purchasing an old house, and did not rely on the statements of the defendant as to the condition of the property; (4) plaintiffs twice inspected the house, once in the company of their own remodeling and redecorating agent." It is true that plaintiffs knew they were buying an old house, but we are unaware of any rule of law which says that one who buys an old house must expect to get a worthless heating system, particularly in the face of the representation discussed above. And the uncontradicted evidence was that the man who went with them was asked for advice only as to termite protection and redecorating,² and that they never discussed the heating plant with him. The finding that the purchasers did not rely on the broker's statements is contrary to the direct and uncontradicted evidence, such reliance being voiced in such plain expressions as, "I didn't doubt it," "I believed it," and "we took her word for it." The finding was erroneous.

The trial judge found, "(5) plaintiffs were put on notice by the recent paint job to examine the boiler for any defects which might have been covered by the paint." This finding was based on an erroneous concept of law. It is in conflict with the rule laid down some years ago in Bailey v. Smith, 57 App.D.C. 369, 371, 23 F.2d 977, 979, as follows: "`There is no rule of law which requires men in their business transactions to act upon the presumption that all men are knaves and liars, and which declares them guilty of negligence, and refuses them redress, whenever they fail to act on that presumption.'" These purchasers testified that the saleswoman gave them specific assurances that the heating system was very good and that they only needed to keep...