ARK.] 1093
BILLY J. WAWAK V. ROBERT 0. STEWART ET AL
5-5016 449 S. W. 2d 922
Opinion delivered February 2, 1970 [Rehearing denied March 9, 1970.] 1. VENDOR & PURCH ASER—CAVEAT EMPTOR IN SALES OF REALTY—MOD. IFICATION OF RULE IN SALE OF NEW HOUSE BY BUILDER-VENDOR. —An implied warranty of fitness may be recognized in the sale of a new house by a seller who was also the builder. 2. COURTS—RULES OF DECISION—EFFECT UPON LEGISLATURE.—COUrt decisions have no effect upon General Assembly's freedom to change the law if it sees fit, but may f ocus legislative attention upon a problem. 3. COURTS—RULES OF DECISION—APPLICATION .—Rule modifying doe- trine of caveat emptor with respect to sale of a new house by builder-vendor is made applicable only to the case at hand and to causes of action arising after the decision becomes final. 4. CONTRACTS—CONSTRUCTION & OPERATION—EXCLUSION OF WARRAN• TIES.—Language in offer and acceptance agreement, which did not purport to exclude all warranties, applied only to defects that might reasonably have been discovered in the course of an inspection by a purchaser of average experience, but did not exclude an implied warranty with respect to a defect which lay beneath a concrete floor and could not have been discovered by even a careful inspection. 5. DA MAGES—MITIGATION—DUTY OF INJURED PERSON:A plaintiff must use reasonable care to mitigate his damages and if the damages could have been avoided at reasonable expense the measure of damages is the amount of such expenses. 16. DA MAGES—MITIGATION—REPARATION BY WRONGDOER.—Purehaser's duty to mitigate damages held not to involve material neces- sary to correct the basic defect. 7. CONTRACTS—VERDICT & FI NDINGS—WEIGHT & SUFFICIENCY OF EVI.• DENCE.—Trial court's judgment that appellant was not entitled to judgment against appellee who installed the duct work under a subcontract held sufficiently supported by the proof. 8. APPEAL & ERROR—VERDICT & FINDINGS—WEIGHT & SUFFICIENCY OF EvIDENCE.—Recovery upon appellees' cross appeal denied under the rule that the verdict need not correspond in amount to the proof adduced by either party.
Appeal from Pulaski Circuit Court, Second Divi- sion, Warren Wood, Judge; modified and affirmed. Tanner & Wallace, for appellant. 1094 WAWAK v. STEWART [247
U. A. Gentry and Wright, Lindsey & Jennings, for appellees.
Stubblefield & Matthews and Joe Purcell, Attorney General; Don Langston, Mike Wilson and Milton Lue- ken, Asst. Attys. Gen., Amici Curiae.
GEORGE ROSE SMITH, Justice. The defendant-appel- lant Wawak, a house builder, bought a lot in North Little Rock in the course of his business, built a house on it, and sold it to the appellees Stewart for $28,500. The heating and air-conditioning ductwork had been em- bedded in the ground before the concrete-slab floor was poured above that ductwork. Some months after the Stewarts moved into the house a serious defect mani- fested itself, in that heavy rains caused water and parti- cles of fill to seep into the ducts and thence through the floor vents into the interior of the house, with conse- quent damage that need not be described at the moment. The Stewarts brought this action for damages. The great question in the case, overshadowing all other is- sues, is whether there is any implied warranty in a contract by which the builder-vendor of a new house sells it to its first purchaser. The trial court sustained the theory of implied warranty and awarded the Stew- arts damages of $1,309.
The trial court was right. Twenty years ago one could hardly find any American decision recognizing the existence of an implied warranty in a routine sale of a new dwelling. Both the rapidity and the unanimity with which the courts have recently moved away from the harsh doctrine of caveat emptor in the sale of new houses are amazing, for the law has not traditionally progressed with such speed. Yet there is nothing really surprising in the mod- ern trend. The contrast between the rules of law ap- plicable to the sale of personal property and those ap- ARR.] WAWAK V. STEWART 1095 plicable to the sale of real property was so great as to be indefensible. One who bought a chattel as simple as a walking stick or a kitchen mop was entitled to get his money back if the article was not of merchantable quality. But the purchaser of a $50,000 home ordinarily had no remedy even if the foundation proved to be so defective that tbe structure collapsed into a heap of rubble.
Several law review articles, of which the earliest was published in 1952, forecast the new developments. Their titles suggest their contents : Dunham, Vendor's Obligation as to Fitness of Land For a Particular Pur- pose, 37 Minn. L. Rev. 108 (1952) ; Bearman, Caveat Emptor in Sales of Realty—Recent Assaults Upon the Rule, 14 Vanderbilt L. Rev. 541 (1961) ; Haskell, The Case For an Implied Warranty of Quality in Sales of Real Property, 53 Georgetown L. Jour. 633 (1965) ; Roberts, The Case of the Unwary Home Buyer : The Housing Merchant Did It, 52 Cornell L. Q. 835 (1967). In 1963 a new edition of Williston's Contracts added its weight to the movement, pointing -out a practical advantage in the new point of view : "It would be much better if this enlightened approach were generally adopted with respect to the sale of new houses for it would tend to discourage much of the sloppy work and jerry-building that has become perceptible over the years." Williston, Contracts, § 926A (3d ed. 1963).
In the past decade six states have recognized an implied warranty—of inhabitability, sound workman- ship, or proper construction—in the sale of new houses by vendors who also built the structures. Carpenter v. Donohoe, 154 Colo. 78, 388 P. 2d 399 (1964) ; Bethlahmy v. Bechtel, 91 Idaho 55, 415 P. 2d 698 (1966) ; Schipper v. Levitt & Sons, 44 N. J. 70, 207 A. 2d 314 (1965) ; Waggoner v. Midwestern Dev. Co., S. D., 154 N. W. 2d 803 (1967) ; Humbqr v. Morton, Texas, 426 S..W. 2d 554, 25 A. L. R. 3d 372 (1968) ; House v. Thornton, Wash., 457 P. 2d 199 (1969). The near unanimity of the 1096 WAWAK V. STEWART [247
nimity of the judges in those cases is noteworthy. Of the 36 justices who made up the six appellate courts, the only dissent noted was that of Justice Griffin in the Texas case, who dissented without opinion. A few excerpts from those recent opinions will il- lustrate what seems certain to be the accepted rule of the future. In the Schipper case the New Jersey court had this to say :
The law should be based on current concepts of what is right and just and the judiciary should be alert to the never-ending need for keeping its com- mon law principles abreast of the times. Ancient distinctions which make no sense in today's society and tend to discredit the law should be readily re- jected. .. . We consider that there are no meaningful distinctions between Levitt's [a large-scale builder- seller] mass production and sale of homes and the mass production and sale of automobiles and that the pertinent overriding considerations are the same. •
Caveat emptor developed when the buyer and seller were in an equal bargaining position and they could readily be expected to protect themselves in the deed. Buyers of mass produced development homes are not on an equal footing with the builder vendors and are no more able to protect themselves in the deed than are automobile purchasers in a position to protect themselves in the bill of sale. Levitt ex- presses the fear of "uncertainty and chaos" if re- sponsibility for defective construction is continued after the builder vendor's delivery of the deed and its loss of control of the premises, but we fail to see why this should be anticipated or why it should materialize any more than in the products liability field where there has been no such result. ARK.] WAWAK V. STEWART 1097 A similar point of view was expressed in the House case by the Washington Supreme Court: As between vendor and purchaser, the builder-ven- dors, even though exercising reasonable care to construct a sound building, had by far the better opportunity to examine the stability of the site and to determine the kind of foundation to install. Al- though hindsight, it is frequently said, is 20-20 and defendants used reasonable prudence in selecting the site and designing and constructing the building, their position throughout the process of selection, planning and construction was markedly superior to that of their first purchaser-occupant. To borrow an idea from equity, of the innocent parties who suffered, it was the builder-vendor who made the harm possible. If there is a comparative standard of innocence, as well as of culpability, the defend- ants who built and sold the house were less innocent and more culpable than the wholly innocent and unsuspecting buyer. Thus, the old rule of caveat emptor has little relevance to the sale of a brand- new house by a vendor-builder to a first buyer for purposes of occupancy. We apprehend it to be the rule that, when a vendor- builder sells a new house to its first intended oc- cupant, he impliedly warrants that the foundations supp orting it are firm and secure and that the house is structurally safe for the buyer's intended pur- pose of living in it. Current literature on the sub- ject overwhelmingly supports this idea of an im- pl ied warranty of fitness in the sale of new houses. The Su preme Court of Texas joined in the wide- spread criticism of the doctrine of caveat emptor in the Humber opinion:
If at one time in Texas the rule of caveat emptor had application to the sale of a new house by a vendor-builder, that time is now past. The decisions 1098 WAWAK V. STEWART [247
and legal writings herein referred to afford numer- ous examples and situations illustrating the harsh- ness and injustice of the rule when applied to the sale of new houses by a builder-vendor, and we need not repeat them here. Obviously, the ordinary pur- chaser is not in a position to ascertain when there is a defect in a chimney flue, or vent of a heating apparatus, or whether the plumbing work covered by a concrete slab foundation is faulty. •
The caveat emptor rule as applied to new houses is an anachronism patently out of harmony with modern home buying practices. It does a disservice not only to the ordinary prudent purchaser but to the industry itself by lending encouragement to the unscrupulous, fly-by-night operator and purveyor of shoddy work.
In 1957 an intermediate New Jersey court refused to recognize implied warranties in the sale of realty. Levy v. C. Young Constr. Co., 46 N. J. Super. 293, 134 A. 2d 717, affirmed on other grounds 26 N. J. 330, 139 A. 2d 738 (1958). That case is no longer the law in New Jersey, owing to the New Jer gPy Supreme Court's decision in the Schipper case, but we should add that the intermediate court's arguments were fully answered by the Supreme Court of Idaho in Bethlahmy v. Bechtel, supra:
The reasoning of the majority in the New Jersey decision that chaotic uncertainty would pervade the entire real estate field if sellers were subject to liability for implied warranty of fitness, and that the rules of caveat emptor would work no harshness on purchasers of real estate, is fallacious, unrealis- tic and unjust when applied to the facts of the case before us. In the situation here the imposition of an implied warranty of fitness would work no more ARK.] WAWAK v. STEWART 1099
uncertainty or chaos than the warranties commonly applied in sales of personal property. Likewise, the statement by the New Jersey court that the plain- tiffs had an opportunity to protect themselves by exacting warranties in the contract and reserving them in the deed, has no application to the facts of the case at bar. A buyer who has no knowledge, notice, or warning of defects, is in no position to exact specific warranties. Any written warranty de- manded in such a case would necessarily be so gen- eral in terms as to be difficult to enforce. It would be like the verbal warranty by defendant in this case, that the house would be a "quality home."
As might be expected, we have been presented with the timeworn, threadbare argument that a court is legis- lating whenever it modifies common-law rules to achieve justice in the light of modern economic and technologi- cal advances. That same argument was doubtless made in a famous case that parallels this one : MacPherson v. Buick Motor Co., 217 N. Y. 382, 111 N. E. 1050, Ann. Cas. 1916C, 440, L. R. A. 1916F, 696 (1916). There the court, with respect to the sale of automobiles, abolished a requirement of privity of contract that was just as firmly embedded in the common law as is the rule that we are now re-examining. Yet the doctrine of the Mac- Pherson case is now accepted as commonplace through- out the nation. We have no doubt that the modification of the rule of caveat emptor that we are now consider- ing will be accepted with like unanimity within a few years. After the case at bar had been submitted to the court we invited the filing of amici curiae briefs, to avoid the possibility that persuasive arguments might be overlooked. The only brief that urges adherence to the old rule was filed by counsel for the Arkansas Home Builders Association.
The AHBA brief makes one point that merits corn- 1100 WAWAR V. STEWART [247 ment. Counsel state that the AHBA "recognizes the need for the imposition of a warranty upon new con- struction." To that end the Association included a one- year warranty requirement in a bill that it sponsored, unsuccessfully, in the 1967 and 1969 sessions of the leg- islature. The main purpose of the bill, however, was to regulate the homebuilding industry by the creation of a governing board and the imposition of licensing re- quirements upon those engaged in the business.
We are not impressed by the AHBA's suggestion that we await legislative action, even though the Asso- ciation concedes that some form of warranty is needed. To begin with, the General Assembly's repeated refusal to enact the proposed law hardly gives assurance that it will be passed in the near future. Furthermore, what- ever decision we reach in this case can have no effect upon the General Assembly's freedom to change the law as it sees fit. To the contrary, a judicial decision may focus legislative attention upon the problem. See, for example, Act 165 of 1969, which was a prompt legisla- tive reaction to our decision in Parish v. Pitts, 244 Ark. 1239, 429 S. W. 2d 45 (1968). To sum up, upon the facts before us in the case at bar we have no hesitancy in adopting the modern rule by which an implied warranty may be recognized in the sale of a new house by a seller who was also the builder. That rule, however, is a departure from our earlier cases; so, to avoid injustice, we adhere to the doctrine announced in Parish v. Pitts, supra, by which the new rule is made applicable only to the case at hand and to causes of action arising after this decision becomes final.
There are three subordinate points that require dis- cussion. First, Wawak insists that all warranties, ex- press or implied, were negatived by this paragraph in the offer-and-acceptance agreement that preceded the execution of a warranty deed when the sale was con- summated: ARK.] WAWAK V. STEWART 1101
Buyer certifies that he has inspected the property and he is not relying upon any warranties, repre- sentations or statements of the Agent or Seller as to age or physical condition of improvements. Even if we assume that the preliminary contract was not merged in the warranty deed, we think it plain that the quoted paragraph did not exclude an implied warranty with respect to the particular defect now in question, which lay beneath the concrete floor and could not possibly have been discovered by even the most care- ful inspection. The quoted paragraph does not purport to exclude all warranties. It merely states that the buyer has inspected the property and is not relying on any warranties as to the age or physical condition of the improvements. Construing the printed contract against the seller, who evidently prepared it, we hold that the clause applies only to defects that might reasonably have been discovered in the course of an inspection made by a purchaser of average experience in such matters. Secondly, the trial court's judgment for $1,309 was composed of the following items of damage to the house and its furnishings, none of which the Stewarts had yet paid: To clean rug $ 75.00 To paint house (interior) 235.00 To clean furniture 22.00 To replace lamp shades 35.00 To clean duct system 200.00 To replace draperies 300.00 Minor repairs 22.00 Drain tile to correct leakage 420.00 $1,309.00 Wawak insists that the recovery of the foregoing items is barred bv the rule that a plaintif f must use reason- able care to mitigate his damages and that if the dam- ages could have been avoided at reasonable expense then 1102 WAWAR V. STEWART [247 the measure 'of damages is the amount of such expense. Curtner v. Bank of Jonesboro, 175 Ark. 539, 299 S. W. 994 (1927) ; Louisville, N. 0. & T. R. R. v. Jackson, 123 Ark. 1, 184 S. W. 450, Ann. Cas. 1918A, 604 (1916) ; Young v. Berman, 96 Ark. 78, 131 S. W. 62, 34 L. R. A. (n. s.) 977 (1910). The pertinent facts are these : The subterranean ductwork radiates from a metal chamber or plenum, which sits under the heating and air-conditioning units. When Wawak and his ductwork subcontractor, Plum- mer, were first notified by Stewart of the seepage, they siphoned off the water through the plenum. They next installed drain tile and gravel along two sides of the house, but those measures fai l ed to correct the trouble. In the meantime Stewart bought a sump pump at a cost of $12.50. Whenever rains caused seepage in the ductwork Stewart would place his pump in the plenum, about two hours after the water had accumulated, and pump the duct system dry. Under that procedure some of the seepage got into the house and caused most of the damage that we have itemized above. Soon after the difficulty first arose Wawak and Plummer proposed the installation of an automatic sump pump, which cost $76 or $78. Their plan was to dig out the floor of the plenum so that the automatic pump would be below the level of the ducts. Whenever the water at the site of the pump rose to a depth of three quarters of an inch the pump would start auto- matically and pump out the water. Thus the water would never rise high enough to overflow the floor vents and damage the interior of the house. Wawak and Plum- mer do not contend that their plan would have corrected the subterranean defect. From Wawak's testimony : "I figured if we could get the pump in there to pump it out, then we could continue to try to find out where [the water] was coming from. It wasn't our intention to just leave it." Wawak stated that when he offered to put in the automatic pump there was no damage to ARK.] WAWAIC V. STEWART 1103
the house except some staining of the draperies, which were cleaned at Wawak's expense. Stewart refused to allow the automatic pump to be installed, insisting that he wanted to know where the water was coming from and would accept nothing less. When the proffer of the pump was refused, Wawak and Plummer abandoned their efforts to correct the trouble. Thereafter Stewart used his own pump in the manner that we have described, with attendant damage to the house and its furnishings. A period of two years or more elapsed before this action was finally brought. In the main Wawak is correct in his argument that the Stewarts should have mitigated their damages by permitting the installation of the automatic pump. On the record made below it is an undisputed fact that such a pump would have 'avoided practically all the itemized damages that were allowed by the trial court.
The pump, however, would not have corrected the basic defect, nor does Wawak so contend. Stewart testi- fied without contradiction and without objection that a man named Gordon could remedy the defect by install- ing drain tile along the remaining two sides of the house at a cost of $425. That corrective measure would not have been rendered unnecessary by the installation of the automatic pump ; so the Stewarts' duty to mitigate their damages does not involve that item. The amount of the Stewarts' judgment will therefore be reduced to $420—the amount allowed by the trial court for the one item of damage that we find to be recoverable. Thirdly, Wawak argues that he is entitled to judg- ment over against the appellee Plummer, who installed the ductwork under a subcontract with Wawak. It can- not be said as a matter of law, however, that Plummer was at fault, because the slab floor above the ducts was poured by another subcontractor. Upon this point the trial court's judgment is sufficiently supported by the proof. 1104 WAWAK V. STEWART [247 Finally, what we have said also disposes of the ap- pellees' cross appeal, by which they contend that the court erred in not allowing them the full amount of some of their itemized claims. In any event recovery upon the cross appeal would have to be denied under the rule established in Fulbright v. Phipps, 176 Ark. 356, 3 S. W. 2d 49 (1928), and the cases that have fol- lowed it, holding that the verdict need not correspond in amount to the proof adduced by either party. The judgment as modified is affirmed. HARRIS, C. J., and FOGLEMAN and BYRD, JJ., dissent.
JOHN A. FOGLEMAN, Justice, dissenting in part, con- curring in part. In its approach to adoption of the mod- ern rule, the majority has overlooked one important step in establishing a liability for breach of an implied warranty. The first step toward the application of the rule adopted is the necessity for evidence establishing a breach. The burden is on one asserting such a breach to prove it. Hydrotex Industries v. Sharp, 212 Ark. 886, 208 S. W. 2d 183; Highsmith Brothers v. Hammonds, 99, Ark. 400, 138 S. W. 635 ; American Standard Jewelry Co. v. R. J. Hill & Son, 90 Ark. 78, 117 S. W. 781 ; Elmore v. Booth, 83 Ark. 47, 102 S. W. 393. The rules regarding this burden and its application to the imposition of implied warranties to real estate transactions involving the sale of dwelling houses are clearly recognized in cases relied upon by the majority. In Bethlahmy v. Bechtel, 91 Idaho 55, 415 P. 2d 698 (1966), that court said: "The implied warranty of fitness does not impose upon the builder an obligation to deliver a perfect house. No house is built without defects, and defects susceptible of remedy ordinarily would not warrant rescission. But major defects which render the house unfit for habitation, and which are not readily remediable, entitle the buyer to rescission and resti- ARK.] WAWAK V. STEWART 1105 tution. The builder-vendor's legitimate interests are protected by the rule which casts the burden upon the purchaser to establish the facts which give rise to the implied warranty of fitness, and its breach. See Schipper v. Levitt & Sons, Inc., supra." In Bechtel the evidence was found sufficient to pre- sent an issue as to breach. The house in question was built over what had been an open irrigation ditch. The builder laid a water conduit in a trench dug along the course of the ditch and covered the ditch with earth. The conduit consisted of 10-inch drain tile in three-foot sections butted together without any water seal in the joints. The house was located so that this conduit was under the concrete floor of an attached garage, seven to nine feet north of the north wall of the house and two to three feet above the floor level of adjacent base- ment rooms. After the irrigation season opened, water naturally seeped in around the edges of the basement rooms and spread over the tiled floors. The soil settled away from the garage floor from two to twelve inches and was wet. A crack developed in the garage floor. It was the builder's opinion that the water came from the tiled ditch under the garage. Efforts were made by the builder to remedy the situation by re-routing the ditch and digging gravel-filled trenches. A hydrologist testi- fied that, in his opinion, the water originally came from the covered tile and thereafter from a "perched" water table established by irrigation water accumulating above a hardpan. He also stated that the concrete in the base- ment walls and floor could have been made waterproof by proper mixture and care in construction. The dam- age shown was great enough that some rooms in the house had to be vacated and bricks were placed under furniture to prevent water damage thereto. Eventually the buyers moved out of the house because of the con- tinued water seepage. The testimony of the hydrologist and other witnesses indicated that the condition would recur every irrigation season. In Schipper v. Levitt & Sons, Inc., 44 N. J. 70, 207 1106 WAWAR v. STEWART [247 A. 2d 314 (1965), cited by the majority and in the Bech- tel case, the court restated its position that it was nec- essary that there be sufficient evidence to prove negli- gent or defective construction. The court called atten- tion to the fact that a former case had been affirmed because of the want of evidentiary support for a fact- finding of negligent or defective construction. On this subject that court said: "Levitt contends that imposition of warranty or strict liability principles on developers would make them 'virtual insurers of the safety of all who thereafter come upon the premises.' That is not at all so, for the injured party would clearly have the burden of establishing that the house was defective when constructed and sold and that the defect prox- imately caused the inju-ry. In determining whether the house Nails defective, the test admittedly Would be reasonableness rather than perfection. As was pointed out in- Courtois v., General Motors Corp., 37 N. J. 525, 182 A. 2d 545 (1962), the comparable warranty, of merchantability in the sale of goods means only that the article is reasonably fit for the purpose for which it is sold and does not imply 'absolute perfection.' 37 N. J., at p. 543, 182 A. 2d 545. See Jakubowski v. Minnesota Mining and Man- ufacturing, 42 N. J. 177, 185, 199 A. 2d 826 . (1964). And as Professor Noel has indicated, though the imposition of warranty or strict liability principles to a ease of defective design, as alleged against Levitt here, would render unneceSsary any allega- tion Of negligence as such, it would not remove the plaintiffs' burden of establishing that the design was 'unreasonably dangerous' and proximately ennsed the injury. Noel, supra, -71 Yale L. J., at pp. 877-878; see also Prosser, 'The Assault Upon the Citadel (Strict Liability to the - Consumer),' 69 Yale L. J. 1099, 1114 (1960). • * • We note, however, as indicated earlier in this ARK.] WAWAK V. STEWART 1107
opinion, that even under implied warranty or strict liability principles, the plaintiffs' burden still re- mains of establishing to the jury's satisfaction from all the circumstances that the design was unreason- ably dangerous and proximately caused the injury. See Noel, supra, 71 Yale L. J., at pp. 877-878; see also Prosser, supra, 69. Yale L. J., at p. 1114."
There the testimony showed that the builder had de- liberately ignored cautions of the manufacturer relating to the necessity for controls on a hot water heater so that the water at the taps in the house would not be ex- cessively hot. There was expert testimony by an engi- neer who had been employed by the builder and who was responsible for the design of hot water systems in houses built by this builder. He recognized that the tem- perature of the water from the hot water tap in the bathroom sink would be excessively high for domestic use and that the manufacturer had recommended con- trol by a mixing valve outside the boiler. In the other cases cited by the majority, there was direct evidence of negligent or defective construction. It is the contention of the appellant that appellee Stew- art has failed to meet his burden of proof b y an affirm- ative showing that appellant breached this implied war- ranty and that the house was not constructed in a good workmanlike manner. He argues that in effect the rul- ing of the lower court is that, without any proof or evi- dence, the house was not constructed in a good work-, manlike manner and, withopt any proof whatever as to the cause of the problem, appellees should recover sim- ply because they bought a new house and subsequently a water situation developed. Because T agree with ap- pellant and both the trial court and this court seem to have ignored the factual situation. I deem it ap propri- ate to state what the record reveals as undisputed evi- dence. Appellant employed an experienced plumbing and 1108 WAWAK V. STEWART [247
heating contractor to design, lay out and install the heating and air conditioning system. This contractor testified about the installation and described the steps in detail, stating that the work was done in compliance with accepted standards. The house was completed al- most exactly one year before its sale to Stewart. The completion date enabled appellant to show the house in the Little Rock-North Little Rock Parade of Homes in September 1963. From this time on, appellant operated the heating and air conditioning system as a matter of preventive maintenance and experienced none of the difficulties about which the Stewarts later complained. The house has been occupied by the Stewarts . from the time of their purchase on August 1, 1964. In March or April 1965, water and fill materials first seeped through the ducts and floor registers of the heating and air con- ditioning system into various rooms of the house. It was stipulated that appellant had no knowledge or notice of any defects until report was made by Stewart. The con- struction of "French drains" by Wawak along the front and one side of the house did not correct the situation. There is still a water problem every time it rains. The Stewarts admitted that they had been unable to ascertain the cause of the difficulty. Appellant testified that he had no idea what was causing the trouble. No one has determined the source. Plummer testified that no one knew how the water gets into the system, but that ac- cumulated water will work through concrete. Wawak learned that there were houses in the Lakewood area in which the same problem had been remedied by the installation of a submergible pump of the type he of- fered to install in the Stewart house. Plummer had cor- rected a similar situation in a house on Waterside Drive by the same means. Mr. Gordon, an engineer employed by Stewart, did not know the source of the water prob- lem, but assured Stewart that the problem could be solved by putting "French drains" on the other two sides of his house. Stewart had done some digging around the sides of the house to plant shrubbery and ARK.] WAWAIC V. STEWART 1109 flowers. He also dug two large holes within 20 feet of the house in which to plant pecan trees. This evidence simply does not show the breach of any implied warranty. It seems significant to me that the Stewarts do not undertake to answer the argument of appellant in this regard in any way. In considering the question of evidence appellee Plummer appropriate- ly argues that the period during which the system had operated satisfactorily was long enough that normal us- age would bring any problems in construction to light. He calls our attention to the fact that the author of the article in the Vanderbilt Law Review, cited in the ma- jority opinion, suggested a model act as one of the rem- edies for problems arising from the adoption of the implied warranty doctrine. He recommended a one-year statute of limitations and commented: "The statute of limitations in section 5 is short, only one year. The act is primarily designed to protect home buyers from structural defects and improper workmanship in newly constructed homes. One year represents a full seasonal cycle and should bring out all defects in existence at the time of the deed, or in case of an installment purchase, at the time the vendee took possession. Defects which masifest themselves later are much more likely due to ordi- nary wear asd tear or the elements, and the one year limitation is designed to prevent the jury's speculating on this amd arriving at unreasonable results." (Emphasis mine.)
I do not believe that the court intends to apply res ipsa loquitur to such cases, but I fear that this is the effect of the action taken. The doctrine has no applica- tion to an action for breach of implied warranty. That is an action on contract. Kapp v. Bob Sullivas Chevrolet Co., 232 Ark. 266, 335 S. W. 2d 819. We have recognized that even in a negligence action the doctrine does not apply unless there is first proof of the elements neces- 1110 WAWAK V. STEWART [247 sary to bring it into play, that the inference arising from the rule does not supply the foundation facts and that its application to a particular set of facts cannot be based upon speculation. Ford Motor Co. v. Fish, 232 Ark. 270, 335 S. W. 2d 713. It was there recognized that it must be shown that the cause of the injury is an agency or instrumentality within the defendant's exclu- sive control and that the cause is not due to any volun- tary action or contribution on the part of the plaintiff. These elements of proof are lacking here. In the Fish case, we relied on the logic of a quotation from Haas v. Buick Motor Division, 20 Ill. App. 2d 448, 156 N. E. 2d 263, 266 (1959), as follows : " The mere fact that an occurrence resulting in damage to property has happened does not author- ize any presumption or inference that the defend- ant was at fault. * * * (Citations omitted.) The mere fact that a fire evidently occurred here, re- sulting in damage to the property, does not author- ize any presumption or inference that the defendant was responsible therefor,—the burden was on the plaintiff to prove, among other things, that there was some material defect in materials or workman- ship. * * * This is not a case for the application of some doctrine analogous to that of res ipsa loquitur." An attempt to apply the res ipsa loquitur doctrine to an action for breach of implied warranty was rejected in Ford Motor Co. v. Tritt, 244 Ark. 883, 430 S. W. 2d 778. There we said that 16,000-mile use of an automobile wheel from December 1962 to March 1964, even without any evidence or use which might affect the condition of the wheel, made it almost imperative that expert tes- timony be used to show that a defect in the wheel was a manufacturing defect. It is clear to me that the Stewarts failed to meet their burden of proof and that the judgment should he reversed as to them. To say the least the majority has ARK.] WAWAK V. STEWART 1111 chosen a rickety vehicle upon which to transport a major industry into a new legal territory, the topography and boundaries of which have not even been explored, much less charted. It is particularly important that the doctrine of stare decisis control in commercial cases where contract- ual and property rights have grown up and business practices developed in reliance thereon. Stability and uniformity of the law in these fields is more important than technical correctness, because day-to-day contract- ing and dealing must be conducted upon the assump- tion that yesterday's precedent will govern tomorrow's disputes. I agree with my brother Byrd that such a step as this was more appropriately one for legislative action. I take it to be conceded that the rule . of caveat emptor heretofore applied in this field is one of com- mon law. I cannot refrain from repeating the observa- tion of the Chief Justice in his dissenting opinion in Parish v. Pitts, 244 Ark. 1239, 1255, 429 S. W. 2d 45, that the very first section appearing in our current di- gest of statutes provides that the common law of Eng- land of a general nature and not inconsistent with the constitution and laws of this nation, or this state, shall be the rule of decision in this state iinlees altered or repealed by the General Assembly of this state. Ark. Stat. Ann § 1-101 (Repl. 1956). Nor can I abstain from repeating an interrogatory propounded in my dissent- ing opinion in that case, i. e., "If 'Ark. Stat. Ann. § 1-101 (Repl. 1956) does not mean that this law can be altered or repealed by the General Assembly, only, then, I ask, what does it mean?" I have heard no satisfactory answer. Merely to label an argument timeworn and thread- bare does not make it so. Yet, being threadbare means only that the nap is worn, not that the fabric is pierced or the warp or woof weakened. To be timeworn is not 1112 WAWAK V. STEWART [247 necessarily to be dilapidated. The wisdom acquired from experience of the ages is also ancient. I do not deem it the function of the judiciary to disregard such a stat- ute merely because we think it is not abreast of the times or, in the modern lingo, not relevant. This is a peculiar function of tbe legislative branch. Some of the courts which have adopted the "en- lightened" approach to this problem have not had to hurdle the obstacle posed by § 1-101. For example, the Washington statute makes the common law the rule of decision so far as it is not incompatible with the institu- tions and condition of society in the state. In New Jer- sey, the 1948 constitution now in effect only provides that all law then in force remain in force until super- seded, altered or repealed by the constitution or other- wise. New Jersey Constitution, Art. 11 § 1 Par. 3. This provision superseded an 1844 constitutional provision as to common law similar to our statute. Clearly, the common law rules could be superseded by judicial action in New Jersey. Courts of other states simply by-pass the barrier, without mentioning it. Still others go traipsing off after decisions in states not faced with this obstacle, without noticing their own limitations. See, e. g., Bethlahmy v. Bechtel, 91 Idaho 55, 415 P. 2d 698 (1966), relying, at least in part, upon Schipper v. Levitt & Sons, Inc., 44 N. J. 70, 207 A. 2d 314 (1965).
I humbly submit that no rule of English common law was altered in MacPherson v. Buick Motor Co., 217 N. Y. 382, 111 N. E. 1050, Ann. Cas. 1916C 440, L. R. A. 1916F 696 (1916). As a matter of fact, Mr. Justice Cardozo reviews the English cases and finds some support for his result. He also found support in earlier cases in New York.
I fully recognize the necessity for growth and de- velopment of the law to fit the needs of our society in ARK.] WAWAK V. STEWART 1113 the present generation without rigid adherence to prin- ciples satisfactory under conditions existing in a past generation. I do not recognize the power of the courts to invade the province of the legislative department in order to "update" the law. To illustrate the necessity for legislative action to engraft this new doctrine upon our law, I point out that numerous sections of our commercial code are devoted to defining and circumscribing implied warranties in personal property transactions and in stating and lim- iting remedies for breaches. Each of these required a separate legislative decision at some point in the proc- ess of drafting and adoption.' The alertness of our General Assembly to desira- bility for modernization of our law is aptly demonstrat- ed by its adoption of the UCC long before it was adopt- ed by most of our states. While the decision here neces- sitates legislative action to undo or limit the action here taken, I deplore the willingness of the court to hand a virtual mandate to the General Assembly to act in a field in which it has clearly indicated that it was not ready to legislate. While I agree that the law should require some type of warranty in situations like that treated by the majority, the investigative powers of the legislature are conducive to a thorough examination of all facets of the problem and are peculiarly suited to a clear definition of the extent and application of such a warranty. We can only meet the multiple questions which will now arise one by one on a case by case basi s. The legislative branch can anticipate most of them. I concur in the affirmance of the judgment in favor or Plummer 1 For example, see the following sections in Arkansas Statutes Annotated, Title 85: definitions, 1-201, 2-103, 2-106, 2-312, 2-314 & 315; rules bearing on rights and remedies, 2-210, 2-301, 2-302, 2-317 & 318, 2-510, 2-515, 2-607 & 608, 2-703, 2-706, 2-711--715, 2-717-721, 2-723, 2-725, 9-113, 9-206, 9-318; exclusion or modifica- tion, 2-316 (Add. 1961). 1114 .WAWAK V. STEWART [247
HARRIS, C. J., joins in this opinion.
CONLEY BYRD, Justice, dissenting. I do not believe that the people of this State elected me to Legislate on the subject of implied warranties in the sale of real estate. The present Constitution of the State of Arkan- sas and also the proposed Constitution places such mat- ters before the General Assembly and I think for good reason. When this Matter comes before the General As- sembly, interested parties, other than the parties to this litigation, with intimate knowledge of the problems in- volved in placing an implied warranty of fitness upon a house will have an opportunity to be heard. However, today's decision will just as surely affect the method and cost of doing business of persons not a party to this litigation as would such action by the General Assem- bly, but our rules of procedure do not permit such par- ties to even be heard on a petition for rehearing.
The personal property warranties, including those involved in the purchase of a shoe string, have been the subject of much thought before legislation regulating the same was enacted, see Uniform Sales Act and the Uniform Commercial Code, Act 185 of 1961. Further- more under the Uniform Commercial Code, Ark. Stat. Ann. § 85-2-316 (3) (a) (Add. 1961), even a blind pur- chaser of a shoe string could not recover upon an im- plied warranty of fitness if he bought the shoe string under a contract stating that he was not relying upon any warranties made by the seller. Ark. Stat. Ann. § 85-2-316 provides :
" (2) . . . Language to exclude all implied war- ranties of fitness is sufficient if it states, for ex- ample, that 'There are no warranties which extend beyond the description on the face hereof.'
" (3) Notwithstanding subsection (2) " (a) unless the circumstances indicate otherwise, ARK.] 1115 all implied warranties are excluded by expressions like 'as is,"with all faults' or other language which in common understanding calls the buyer's atten- tion to the exclusion of warranties and makes plain that there is no implied warranty ; and
" (c) an implied warranty can also be excluded or modified by course of dealing or course of perform- ance or usage of trade." Therefore even if we applied the statutory warran- ty law applicable to personal property, the implied war- ranty which the majority here finds would be excluded not only by the language- in the sales contract but also by the usage of trade under subsection (3) (e) of Sec- tion 85-2-316 of the Commercial Code. For these reasons, I respectfully dissent.