1. The vendor of a new residence is not liable for its defective condition unknown to her, and absent fraud, on the theory of implied warranty.

2. Where persons enter into a contract for the erection of a structure on land of a third person, and it proves to be defective in such manner as to damage the contracting party, he may elect to bring an action for negligence against the builder founded on the violation of rights accruing to him under the contract.

ARGUED JANUARY 5, 1971 — DECIDED MARCH 5, 1971 — REHEARING DENIED MARCH 29, 1971 — CERT. APPLIED FOR.

Amos entered into a contract with John McDonald by which the latter agreed to build a house according to the former's specifications on a physically designated lot. The specifications were in no way defective. It appears that the lot was owned by a corporation known as McDonald Enterprises, of which McDonald was one of four or five shareholders. The lot was deeded to Heide McDonald, wife of the builder, and by her sold, with the completed house on it, to the plaintiff. About three years later a wall surrounding the fireplace burned, inflicting substantial damage for which Amos sued both McDonalds in the first count on breach of implied warranty of fitness in the sale of a new home, and sued John McDonald as contractor for negligence in construction in the second count. There was substantial evidence that the fire resulted from defective construction of the chimney flue in violation of city ordinances in that it was not sealed with mortar, allowing the escape of burning gases within the framework of the wall and igniting wooden studs placed too close to the outside of the chimney. The trial court directed a verdict for both defendants at the close of the evidence and plaintiff appeals.

DEEN, Judge.

1. In Georgia no distinction is made between the sale of new and used property. The doctrine of "caveat emptor" applies; agreements for the construction of a house to be placed on the property at the time of purchase are merged in the deed unless expressly exempted therefrom or unless they come under the collateral agreement theory, where the deed contains no express warranty of suitability for the use intended of structures placed thereon, with certain exceptions relating to fraud and misrepresentation not here applicable. Dooly v. Berkner, 113 Ga. App. 162 ( 147 S.E.2d 685); Tison v. Eskew, 114 Ga. App. 550 ( 151 S.E.2d 901); Whiten v. Orr Constr. Co., 109 Ga. App. 267 ( 136 S.E.2d 136). No cause of action under existing Georgia law is set out in the first count against either of the defendants.

2. Count 2 is against John McDonald only as a result of a negligent breach of his contract of construction with the plaintiff. Since McDonald was not a builder-owner or builder-vendor, caveat emptor does not apply. (In fact, this defendant successfully objected to the introduction of any evidence which might have shown that Mrs. McDonald was not the true owner-vendor or that the builder had any personal interest in the real estate). He was, therefore, suable for his negligence in performing the contract because in failing to follow building code standards he violated a private right of the plaintiff, and to elect to sue in tort rather than on contract. Rawls Bros. Co. v. Paul, 115 Ga. App. 731 (1) ( 155 S.E.2d 819); Frank Graham Co., v. Graham, 90 Ga. App. 840 (1) ( 84 S.E.2d 579). There being substantial testimony that the fire-place was not installed in a workmanlike manner or in accordance with applicable fire ordinance requirements, and that this was the proximate cause of the damage, it was error to direct a verdict in favor of the contractor under Count 2 of the petition.

3. Apparently the trial judge felt that evidence showing the plaintiff had lived in the house for a period of about three years precluded his recovery as a matter of law. It might well do so as a matter of fact. "That the employer in a building contract, on the retirement of the builders, recognized the contract as complied with, he not having made then nor until sometime afterwards any suggestion to the contrary, is pertinent to the question of whether the contract was in fact complied with; and such recognition need not be express, but may be implied from the circumstances." Porter v. Wilder Son, 62 Ga. 520, 526. The statute of limitation, however, begins to run, as stated in Hunt v. Star Photo Finishing Co., 115 Ga. App. 1, 5 ( 153 S.E.2d 602), "when the negligent acts were committed resulting in damage to the plaintiff ..., the owner, and not when a portion of the building collapsed." Since this action was brought within four years of the building of the chimney, and since the defect was latent and not discoverable until the fire, we are satisfied that a jury question was raised on this point.

The trial court properly directed a verdict in favor of the defendant vendor, Heide McDonald, but erred in removing Count 2, based on negligent construction by the defendant contractor, John McDonald, from jury determination.

Judgment affirmed in part; reversed in part. Bell, C. J., concurs. Pannell, J., concurs in the judgment only. Deen, J., concurs specially.