Opinion
No. 4985.
Argued November 8, 1961.
Decided December 29, 1961.
1. Contributory negligence is no defense to an action for intentional wrong.
2. Where the defendant prior to the sale of premises to the plaintiffs undertook to describe to them the quality of the water supplied to the premises from an artesian well but intentionally concealed a material fact concerning contamination of the water the plaintiffs were properly found in an action for deceit to have justifiably accepted defendant's statements at face value and relied thereon even though slight investigation would have disclosed their falsity.
Action at law alleging deceit and breach of warranty in the sale of certain premises in Harrisville. The plaintiffs alleged false and fraudulent representations that an artesian well on the premises furnished water "fit for human consumption" when in fact it did not because of the presence of kerosene in the well.
Trial by the court (Grant, J.) who made findings and rulings in writing, and returned a verdict for the plaintiffs in the sum of $1,529.92; which was the expense incurred in installing a new well.
The defendant excepted to denial of her motions for nonsuit and directed verdict, and to the verdict for the plaintiffs. Reserved and transferred upon the defendant's exceptions, by the Presiding Justice.
The real estate sold by the defendant to the plaintiffs consisted of a general store, with living quarters overhead. The sale was consummated in June 1959, a year or two after the decease of the defendant's husband. According to the plaintiff husband's testimony, he sought out the defendant in March 1959 with a view to purchasing the business, of which he had general knowledge as a summer resident of Harrisville.
At the time the defendant was residing with a nephew in Dublin, and the plaintiffs resided in Keene in property which was ultimately exchanged for the Harrisville store. Later in the year the defendant resumed her residence above the store, and the plaintiffs visited the premises on several occasions to inspect the property and to have an accountant examine the business records of the store.
In the course of the negotiations, the plaintiff husband observed stains on a sink in the store, and inquired "what was in the water which made it so red and [the defendant] said it was mineral in the water."
Shortly before the sale the plaintiff husband learned that the water was reputed to be questionable. A selectman with whom he had discussed the matter, testified that he advised the plaintiff that it "would behoove him to inquire into the water" and that the plaintiff had replied "Do you mean about the oil?" The plaintiff himself testified that he was told by the selectman that there might be kerosene in the water. As a result the plaintiff again inquired about the water, and as the Trial Court found, was told by the defendant that it had a mineral taste but that it was "usable and drinkable."
The evidence indicated that the artesian well in question was drilled in 1949, and that in 1951 a leak developed in an underground tank used for the storage of kerosene. The Court found that the defendant and her husband believed "that this leak had permeated the soil and in some fashion had come into the artesian well."
The defendant's evidence was that the well was nevertheless used for drinking and all other household purposes up to the time of the sale, although spring water was used for drinking purposes by some members of the family in the summertime.
The defendant conceded that the water tasted and smelled of kerosene, although she maintained that she herself was unable to smell the kerosene, and that "to me it was more an iron taste than it was a kerosene taste." She denied that she was ever asked by the plaintiffs if the water contained kerosene, or that she told them anything that was untrue.
The plaintiff testified that when he told the defendant that he had heard rumors that there was kerosene in the water, and asked her about it, "she evaded me again . . . All she said was there was mineral in the water." He testified that he did not look at the water at any time, and neither tasted nor smelled it. By way of explanation he stated that "most generally an artesian well is sealed off properly" and "I felt if I bought the place I could put a filter on to get the iron out of it."'
The Trial Court found and ruled in part as follows: "The Court finds that the defendant did not disclose to either of the plaintiffs that the oil tank had leaked into the ground and that the cause of this mineral taste was thought to be from kerosene.
"There is no evidence that the water had a bacteria count of note, or that it had ever produced any untoward results upon those persons who had used it over the years. It is found, however, that it was somewhat discolored, that it contained a sediment, and that it had a definite odor and taste of kerosene, and that the average person would have found it to be unpleasant for drinking.
"It is also found that at no time did Mrs. Pope do anything actively to conceal the source of the kerosene taste and odor, nor did she prevent the plaintiffs from sampling the water, although the Court feels that under all the circumstances of the case she was somewhat less than candid in the matter, and that her failure to mention the probable cause of the contamination was for the purpose of facilitating and bringing about the ultimate sale to the plaintiffs and that she was successful in that purpose. The plaintiffs, although quite able at any time to have sampled the water or tested it, apparently did not (which would have been quite simple to have done) but rather chose to accept the defendant's statement that it was usable and drinkable, and that it tasted of minerals."
In response to requests filed by the defendant, the Court found and ruled that the plaintiffs did not use reasonable care to investigate after they were told that the water had minerals in it, and that there was kerosene in it, and they had seen the red stains made by the water; and that they did not use "ordinary care to investigate the water prior to the purchase although they had every opportunity to do so and the defendant in no way attempted to dissuade them from so doing."
The Court further found and ruled: "However, on what the Court believes to be the New Hampshire doctrine of contributory negligence as a defense in actions sounding in deceit, the Court finds in favor of the plaintiffs" in the amount of the verdict.
Arthur Olson, Jr. (by brief and orally), for the plaintiffs.
Howard B. Lane (by brief and orally), for the defendant.
The defendant maintains that the plaintiffs are not entitled to recover because there is no finding that the defendant made any intentional misrepresentations, because she was under no duty to disclose that kerosene had leaked into the well some years previously, and because it was found that the plaintiffs themselves were contributorily negligent.
While there was no finding of intentional misrepresentation in so many words, there were findings that the defendant believed that kerosene "had come into the artesian well," that she "did not disclose . . . that the cause of [the] mineral taste was thought to be from kerosene," and that this "was for the purpose of facilitating and bringing about the ultimate sale . . . ." The plain implication is that the defendant's failure to disclose the facts was an intentional concealment, for a fraudulent purpose.
In asserting that she was under no duty to disclose the past presence of kerosene, the defendant relies upon Benoit v. Perkins, 79 N.H. 11, 15, where it was said: "The duty to speak must arise from the circumstances, or there must be some relation of trust and confidence between the parties upon which to build the duty to disclose, before the failure to disclose can be deemed a fraud, whatever motive led to the concealment." Also cited by the defendant is Charlton v. Brunelle, 81 N.H. 13, 15, where it appeared however that the "element of the dishonest mental state upon [the defendant's] part [was] wholly lacking."
Had the defendant made no representations concerning the water her position would be welt taken. 1 Harper James: The Law of Torts, s. 7.14. But in this case, the defendant undertook to describe the quality of the water, and did so in an accurate, but findably incomplete manner. The Trial Court found that her failure to state the probable cause of the contamination was "somewhat less than candid," or in effect a half-truth, tantamount to falsehood. Restatement, Torts, s. 529; 1 Harper James, supra, s. 7.14 at 587. See Swinton v. Whitinsville Savings Bank, 311 Mass. 677, 678. Since she undertook to speak, the circumstances imposed upon her a duty not to mislead. Benoit v. Perkins, supra.
The case resolves itself into a question of whether the plaintiffs were justified in accepting the defendant's statements at face value, and if so, whether they could be found to have relied upon them and been misled thereby. Lampesis v. Comolli, 101 N.H. 279, 284; Gilbert v. Dodge, 130 Me. 417, 419; 1 Harper James, supra, s. 7.13.
Despite the possibility that the plaintiffs were not misled into believing that the water was free from kerosene but preferred to run the risk of poor water for the sake of acquiring the property in exchange for their own, the record did not compel a finding that this was so. The finding by the Trial Court that the defendant was "successful in [her] purpose" (to bring about the sale) and that the plaintiffs "chose to accept the defendant's statement" was a finding that they relied upon her statement and were misled. The plaintiffs correctly assert that contributory negligence is no defense to an action for intentional wrong. Wright v. Noyes, 80 N.H. 172. The older cases upon which the defendant relies state an earlier rule, since disavowed by later cases. See Seavey, Fraud and Misrepresentation in New Hampshire, 1 N.H. B. J. No. 1, pp. 23-24; Prosser on Torts (2d ed.) s. 89 at 552-553. In a case of intentional wrong, the standard applied to the plaintiff's conduct is not that of ordinary care, but an individual standard, based upon his own capacity and knowledge. Prosser on Torts, supra, s. 89 at 552.
In Restatement, Torts, s. 541, one rule with respect to reliance is stated thus: "The recipient in a business transaction of a fraudulent misrepresentation is not justified in relying upon its truth if its falsity is obvious." The comment is then made that while the recipient is not barred because he could have discovered the falsity by investigation, "he is nonetheless required to use his senses and cannot recover if he blindly relies upon a misrepresentation the falsity of which would be patent to him if he had utilized his opportunity to make a cursory inspection of the article." Id., comment a. See also, 1 Harper James, supra, s. 7.12; Annot. 174 A.L.R. 1010, 1027-1030.
The other side of the coin is portrayed in Restatement, Torts, s. 540, where it is said that the recipient of a fraudulent misrepresentation of fact is justified in relying upon its truth although investigation might have disclosed its falsity; and the comment is made that the rule applies not only when investigation would be difficult, "but also where it could be made without any considerable trouble or expense." Id., comment a.
Although the Trial Court's findings indicate that an investigation in this case would have involved no particular trouble, the conclusion that the plaintiffs' reliance was justified is implicit in the verdict. If a different view might have been taken upon the evidence, we cannot say that the trier of the facts who heard and saw the parties was compelled as a matter of law to adopt it.
Any defects in the water disclosed by the defendant's disarming statements were such as the plaintiffs might reasonably expect to be able to remedy without abandonment of the water supply. While the vendors of property should not be expected to volunteer information as to every adverse feature however patent, the "law of the present day does not assume in all cases that [they] are endeavoring to defraud the vendees by false and fraudulent representations, and consequently require vendees to distrust such representations and seek the information elsewhere, or suffer the consequences." Sipola v. Winship, 74 N.H. 240, 248.
We conclude that the issue presented by this case was one of fact for the Trial Court, and that there were no errors of law.
Judgment on the verdict.
All concurred.