Jenkins v. McCormick
184 Kan. 842, 339 P.2d 8, 1959 Kan. LEXIS 337 (1959)
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Rule of Law:
A builder-vendor has a duty to disclose latent defects known to them but not reasonably discoverable by the purchaser, and active concealment of such defects constitutes fraud, rendering the rule of caveat emptor inapplicable.
Facts:
- Plaintiff purchased a newly constructed house from the defendant, a contractor.
- The house contained a basement apartment with an asphalt tile floor laid on concrete.
- The concrete in the basement floor had been allowed by the defendant to set and dry without being smoothed and properly troweled.
- The defendant, knowing the concrete floor was improperly constructed, placed asphalt tile over it.
- The defendant knew that due to the improperly prepared concrete, the asphalt tile would crack and come loose in a short period.
- The defendant concealed these floor defects from the plaintiff, who was unable to ascertain them by inspection.
- Plaintiff was induced to purchase the house without knowledge of the latent defects.
- The entire basement asphalt tile floor broke up within two weeks after the house was purchased.
Procedural Posture:
- The appellee (plaintiff) filed a suit against the appellant (defendant) in district court, alleging fraudulent concealment of a latent defect in a newly constructed house.
- Plaintiff filed a second amended petition.
- Defendant filed a motion to make definite and certain and to strike paragraphs from the second amended petition.
- The trial court overruled the defendant's motions in their entirety.
- Defendant filed a general demurrer to the second amended petition, asserting that it did not state facts sufficient to constitute a cause of action.
- The trial court overruled the defendant's general demurrer.
- The defendant (appellant) appealed the trial court's order overruling the demurrer to this court.
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Issue:
Does a petition alleging that a builder-vendor fraudulently concealed a latent defect, which was known to the builder and caused by their workmanship but not reasonably discoverable by the purchaser, state a cause of action sufficient to withstand a general demurrer?
Opinions:
Majority - Jackson, J.
Yes, a petition alleging that a builder-vendor fraudulently concealed a latent defect known to the builder but not reasonably discoverable by the purchaser states a cause of action sufficient to withstand a general demurrer. The court held that where a builder of a house effectively conceals a known defect caused by his own workmanship, the rule of caveat emptor does not apply, and such concealment amounts to fraud upon the purchaser. Citing 23 Am. Jur. 857, § 80, and 37 C. J. S. 246, § 16b, the court reasoned that a party with superior knowledge of a fact not within the reasonable reach of the other party, and which the other could not discover through reasonable diligence, is under a legal obligation to speak. If the concealed fact is peculiarly within one party's knowledge and the other is justified in assuming its nonexistence, there is a duty of disclosure, and deliberate suppression constitutes fraud. The plaintiff's petition sufficiently alleged that the defendant, as the builder, improperly constructed the concrete floor, knew of the defect, actively concealed it with asphalt tile, and that the plaintiff was unaware and unable to discover the defect by inspection. Therefore, the trial court did not err in overruling the demurrer.
Analysis:
This case significantly limits the application of caveat emptor in transactions involving builder-vendors and latent defects. It clarifies that a builder-vendor has an affirmative duty to disclose known latent defects, especially those arising from their own construction. This ruling provides greater protection for purchasers of newly constructed homes, shifting some of the risk of undiscoverable flaws from the buyer to the builder. Future cases are likely to apply this principle when assessing claims of fraudulent concealment by builders regarding defects they caused or knew about.
