Vetor v. Shockey

• Decision Date: 04 December 1980
• Docket Number: No. 2-279A44,2-279A44
• Citation: 414 N.E.2d 575
• Parties: Thomas (Tommy) VETOR, Appellant (Defendant Below), v. Richard SHOCKEY and Judy Shockey, Appellees (Plaintiffs Below).
• Court: Indiana Appellate Court

Page 575

414 N.E.2d 575

Thomas (Tommy) VETOR, Appellant (Defendant Below), v. Richard SHOCKEY and Judy Shockey, Appellees (Plaintiffs Below).

No. 2-279A44.

Court of Appeals of Indiana, Second District.

Dec. 4, 1980.

Dennis V. Panarisi, Marion, for appellant.

SULLIVAN, Judge.

Judy and Richard Shockey filed a small claims action against Thomas Vetor on April 24, 1978, alleging that they had purchased a house from Vetor in October of 1977, that Vetor had warranted that the septic tank was in working order, but that in fact the septic system needed extensive repair. After a bench trial the court found the following:

"(T)he defendant is liable to the plaintiff for latent defects not discoverable by the plaintiff's reasonable inspection which manifested themselves after the purchase of the realty in question. This being specifically, that there was an implied warranty that the septic system was in proper working order and that subsequent to the purchase, the plaintiff did find that the septic tank was not in proper working order." (Emphasis supplied.)

Vetor presents one issue for our review, namely: did the trial court err, as a matter of law, when it determined that an implied warranty of habitability existed in the sale of a used home by a non builder-vendor? ¹

At the outset, we note that the Shockeys, the appellees, have not filed a brief. Therefore, to obtain reversal, the appellant's brief need only demonstrate prima facie reversible error. Wagner Construction Co. v. Noonan (1st Dist. 1980) Ind.App., 403 N.E.2d 1144, 1146; J. E. G. v. C. J. E. (2d Dist. 1977) 172 Ind.App. 515, 517, 360 N.E.2d 1030, 1033.

This action was brought in small claims court and under the informal procedures prescribed for such courts, no trial transcript was made. However, pursuant to the procedure outlined in Ind. Rules of Procedure, Appellate Rule 7.2(A)(3)(c), Vetor submitted a statement of the evidence adduced at trial to both the trial judge and the Shockeys. Approximately two weeks later the court, without objection from the Shockeys, certified that statement to be a true and accurate account of the proceedings. The facts as gleaned from that statement are as follows: The Shockeys purchased the house from Vetor in October of 1977; Vetor had owned and occupied the home for four years but had not built it. The purchase agreement specified that Vetor would deliver a general warranty deed conveying the real estate "in the same condition as it now is, ordinary wear and tear excepted...." Prior to taking possession, the Shockeys questioned Vetor about the condition of the septic system, which was installed by an independent contractor in October of 1973, and he informed them that the system was in "satisfactory working condition except for certain times of the year when there would be a lot of water on the ground, the septic system might be a little slow." The Shockeys experienced trouble with the system, manifested by the malfunctioning of the toilet and the washing machine. They obtained an estimate for the cost of repair amounting to $1000.50.

Under the common law tradition, the doctrine of caveat emptor governed the purchase of real estate. The theory underlying caveat emptor was that buyers and sellers dealt at arm's length and that if the purchaser sought any warranties, those warranties should be negotiated and incorporated into the written contract. Additionally, purchasers were presumed to have the means and the opportunity to examine the property and judge its qualities for themselves.

Recently, caveat emptor has been viewed with disfavor and many jurisdictions including Indiana have adopted the doctrine of implied warranty of habitability for the purchase of a new home from a builder-vendor. In part, this is due to a recognition of the sale of goods concept that a sound price merits a sound article. Humber v. Morton (Tex.1968) 426 S.W.2d 554. In addition, the following rationales have been offered:

1. caveat emptor encourages unscrupulous, shoddy workmanship,

2. buyers of mass produced development homes are not on equal footing with builder-vendors,

3. the purchase of a home is not an everyday transaction so, as a result, most purchasers are inexperienced and must rely on the skill and expertise of the builder-vendor.

See Barnes v. Mac Brown & Co. (1976) 264 Ind. 227, 342 N.E.2d 619; Theis v. Heuer (1972) 264 Ind. 1, 280 N.E.2d 300. In the Barnes case, supra, our Supreme Court extended the protection of the home builders' implied warranty of habitability to a subsequent purchaser. See also Wagner Construction Co. v. Noonan, supra, 403 N.E.2d at 1146-47.

Our research, however, has uncovered no Indiana cases expanding this implied warranty concept to the purchaser of a used house from a non builder-vendor. Those jurisdictions which have been confronted with such factual situations have universally rejected such expansion. The refusal to extend the doctrine is seemingly premised on the idea that in the sale of used housing, the vendor usually has no greater expertise in determining the quality of a house than the purchaser. Waggoner v. Midwestern Development Inc. (1967) 83 S.D. 57, 154 N.W.2d 803; see Gallegos v. Graff (1973) 32 Colo.App. 213, 508 P.2d 798; Spano v. Perry (Sup.Ct.1969) 59 Misc.2d 1062, 301 N.Y.S.2d 836; Cohen v. Blessing (1972) 259 S.C. 400, 192 S.E.2d 204.

The extension of the doctrine to purchasers of used homes from non builder-sellers is not totally without support however. Paul Haskell in his article The Case for an Implied Warranty of Quality in Sales of Real Property, 53 Geo.L.Rev. 633 (1965) argues persuasively:

"Most sales of personal property involve new goods. Most sales of real property involve used construction. If the implied warranty is recognized only in the sale of new construction, then the law offers only occasional protection to the purchaser. The typical sale of improved real estate involves a good deal of money; in the case of the home purchase, it...