Driver v. Melone

Opinion

Appellant, Bob J. Driver, purchased from respondents, Earl and Genevieve Melone, a parcel of land improved with an old and dilapidated house. A few months after the sale was consummated the county fire department posted it as dangerous and declared it condemned because of defective electric wiring. Appellant instituted an action for rescission and damages and claimed at trial that respondents misrepresented the conditions of the premises and concealed their knowledge that the property was to be condemned. The trial court disagreed with these claims and rendered judgment for defendants-respondents.

Appellant contends on appeal that the evidence does not support the trial court’s finding that there was no misrepresentation and, further, the trial court erred in failing to make a finding, after request, on the issue of concealment.

Appellant Driver signed the deposit receipt and agreement of sale and paid the required deposit of $500. The total purchase price was $13,000. The agreement of sale provided that appellant was purchasing the property “as is.” It also contained a provision (Item 4) that it was subject to inspection by the buyer for a period of five days following the contract date. Three days after signing the agreement appellant wrote to respondent Hunter as follows: “. . . The purpose of this letter is to remove the contingency as indicated in item (4) of my agreement dated November 28, 1964, to purchase the residence known as 1508 Cervato Drive, Alamo, California. Approval of the house is hereby acknowledged. . . .”

Several days after he executed the deposit receipt and agreement to sell, but prior to the close of the escrow, appellant requested Hunter to obtain a letter from the Melones affirming the fact that there were no condemnation proceedings pending on the property. Respondents Melone, pursuant to to this request, wrote as follows: “To Whom It May Concern: As of the above date, I hereby declare that to my knowledge there is no condemnation proceedures [sic] by Contra Costa County authorities, pending or otherwise, relative to the property . . . known as 1508 Cervato Drive, Alamo, California being Parcel #03, Page #37, Contra Costa County Assessor’s Map Book #188. . . .”

At the time the Melones informed appellant that there were no condemnation proceedings pending, the county building authorities had written and the Melones had received the two letters previously referred to demanding that the building code violations be remedied. Appellant argues that he would not have closed the escrow, or made the offer, had he known about the county’s activities, since without income the property was worthless to him, and that appellant’s associate, Mullins, would not have advised him to buy the property if he was aware of the problems with the county. Appellant claims Melone signed the letter of December 4 knowing that it would be relied upon by the buyer to close the transaction, and knowing that the “purchasers should be aware of the abatement proceedings.”

In determining whether there was a concealment or misrepresentation, the testimony of a Mr. Taylor, a building inspector for the County of Contra Costa, is of particular importance. He testified that the defective wiring was obvious to anyone who inspected the building. Likewise the wooden foundations were unobscured and were conspicuous without the necessity of looking through the access hole under the house. He acknowledged that if a person just took a walk around the house it would become

Appellant’s contention that he would not have purchased the property if he had known of the problem with the building department is not consistent with his actions.

The evidence seems clearly to imply that he, as an engineer and as an experienced dealer in real estate, was not interested in the building department’s requirements. Those defects were glaringly obvious. It is noted that appellant did not seek to elicit from respondents any specifications of the repairs that were necessary to have the building conform to the county building codes. His only query concerned the pending of condemnation proceedings and this concern was manifested after and not before he executed the agreement of sale. Appellant’s failure to follow the advice of the building department to obtain an authorization to inspect the county files is puzzling except that his counsel supplied a partial answer when arguing the appeal. He stated that appellant did not make a positive inquiry of the building department because he did not desire “to stir them up” or “to activate their interest in the property.”

It also appears that appellant’s lack of interest in the county building' department’s requirements is evidenced by his failure to obtain a building permit when he made rather extensive repairs to the building. The only inference to be drawn from the failure to obtain the building permit is that appellant was well aware of the requirements of the building department and did not desire to be officially informed of noncompliance with their demands.

Appellant’s associate, Mullins, was equally lacking in interest in anyone else’s views concerning the property. He relied on his own inspection. He

It is also to be noted that appellant, in addition to the obvious condition of the property, was put to some notice of defects by the wording of the agreement. The agreement specified that he was purchasing the property “as is.” (Italics added.) It is quite true that this clause alone does not in itself protect the sellers or absolve them from liability for misrepresentation or passive concealment.

In the early case of Smith v. Richards (1839) 38 U.S. 26 [ 10 L.Ed. 42 ], involving the sale of a purported gold mine, the seller wrote to the buyer and said: “. . . T, however, sell it for what it is, gold or snow-balls; and I leave it to you to decide, whether you will take it at my price, or not. . . (P.39 [10 L.Ed. p. 49].)

The court said at page 35 [10 L.Ed. at p. 47]: “It is an ancient and well-established principle, that whenever suppressio veri or suggestio falsi occur, and more especially both together, they afford a sufficient ground to set aside any release or conveyance.”

This ancient principle thus expressed with sententious brevity is a principle of law today but is inapplicable under the facts of this case.

In Lingsch V. Savage, 213 Cal.App.2d 729 [ 29 Cal.Rptr. 201 , 8 A.L.R.3d 537 ], the court said: “It is now settled in California that where the seller knows of facts materially affecting the value or desirability of the property which are known or accessible only to him and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer. [Citations.] . . .” (P. 735.)

“. . . A provision in a contract of sale that the buyer takes the property in the condition in which it is, or ‘as is,’ does not necessarily confer on the seller a general immunity from liability for fraud. It is fairly well established in respect to sales of personal property that such a provision ‘does not prevent fraudulent representations relied on by the buyer from constituting fraud which invalidates the contract or is a ground for damages.’ [Citations.]” (Pp. 740-741.)

While the “as is” provision does not relieve a seller of all responsibility of disclosure, it is a factor to be considered with all other circumstances in determining whether the buyer has been misled.

In the case before us these essential elements are not present.

Here we do not have a fiduciary relationship between the parties. Also, there is an absence of a duty created by superiority of intellect, training or ability of the seller. The appellant-buyer is a university graduate engineer, skilled in dealing in real estate transactions with a distinct knowledge of value and requirements of repairs and their costs. He also had an associate in the transaction whose very business—that of a loan broker and appraiser—made him familiar with properties. In addition, not only was there no misinformation, but also the sellers’ real estate broker fully advised the buyer that the property was a “dog” and in a dangerous, defective and dilapidated condition.

The letter from respondents to appellant stating that there were no condemnation proceedings pending was accurate. This was confirmed by Inspector Taylor of the building department who stated that up to the time of trial his department had not commenced those procedures. Appellant does not dispute the testimony but argues that in effect he should have been made aware of the department’s demands to respondents, which facts were omitted in respondents’ letter.

Whatever information was in the possession of the respondents was known, or readily accessible, to the appellant. There is no evidence that respondents had information concerning the property which was unknown or beyond the reach of appellant, or that appellant was induced to purchase the property by a nondisclosure of relevant and material information. He was specifically instructed by the county building department to obtain an authorization which would permit inspection of records. This appellant chose not to do.

It is true that the trial court failed to make a specific finding, after request, on the issue of concealment. Code of Civil Procedure section 634 requires the court to make a finding of fact on every material issue necessary to support the judgment. Here the court did find that there was no

For the foregoing reasons the judgment is affirmed.

Draper, P. J., and Caldecott, J., concurred.