Summary
holding that a building code violation “with respect to which the agency charged with enforcement has begun to take official action is an encumbrance” and distinguishing such circumstances from those where violations existed but no official action had been taken prior to conveyance
Summary of this case from Farms v. BaughOpinion
March 7, 1958 —
April 8, 1958.
APPEAL from a judgment of the circuit court for Rock county: HARRY S. FOX, Circuit Judge. Reversed.
For the appellants there were briefs by Blakely, Long, Grutzner Jaeckle of Beloit, and oral argument by J. R. Long.
For the respondent there was a brief by Field, Rikkers Brickhouse of Madison, and oral argument by John B. Brickhouse.
On March 12, 1957, plaintiffs brought an action for damages for breach of a grantor's covenant against encumbrances. Plaintiffs alleged that defendant, on August 25, 1955, conveyed premises to plaintiffs. The deed is set out and includes a covenant "that the same are free and clear from all incumbrances whatever." It was also alleged that at the time of conveyance there were six violations of orders of the industrial commission issued under ch. 101, Stats. A copy of an industrial commission certificate of inspection, dated August 18, 1955, was also set out listing the orders violated and corrections required. The premises are referred to therein as an apartment building. The specific requirements are to provide two separate exits from each apartment, to rebuild or repair the back porches, to provide a one-hour, fire-resistive enclosure for the furnace and fuel supply, to provide a handrail on the basement stairs, to have an electrician check the wiring and make it comply with the electrical code, to line with metal all hot-air ducts and returns. Plaintiffs alleged that the violations constituted encumbrances and that they were damaged thereby.
Defendant demurred and the circuit court sustained the demurrer with leave to amend the complaint. Plaintiffs failed to amend, and judgment dismissing the complaint with costs was entered September 23, 1957. Plaintiffs appealed.
This court has held that a restriction imposed by law on the use of real estate is not an encumbrance. Miller v. Milwaukee Odd Fellows Temple (1932), 206 Wis. 547, 240 N.W. 193. The opinion suggested that a charge against premises by reason of a violation of a zoning ordinance would be an encumbrance.
"However, the existence of improvements requiring alterations or removal in order to comply with either public or private restrictions appears to be an encumbrance." 4 American Law of Property, p. 813, sec. 18.82.
In Lohmeyer v. Bowers (1951), 170 Kan. 442, 227 P.2d 102, the court decided that location of a structure in violation of a zoning ordinance specifying a minimum distance from the rear lotline exposed the owner to the hazard of litigation and made the title doubtful and unmarketable. Similar decisions were made in Moyer v. DeVincentis Construction Co. (1933), 107 Pa. Super. 588, 164 A. 111 (location of house violated set-back provision of ordinance); Oatis v. Delcuze (1954), 226 La. 751, 77 So.2d 28 (building with three apartments violated zoning ordinance limiting residences to one or two families and containing minimum rear and side-yard requirements).
Giving the complaint before us appropriate liberal construction, it appears that the improvement on the premises conveyed by defendant is an apartment building and subject to ch. 101, Stats.; that as an apartment building its state of repair and construction was such as to violate the building code issued by the industrial commission to implement ch. 101; that prior to the conveyance, a representative of the commission had inspected the premises and the commission had determined, administratively, that the violations existed.
The building code is not a restriction upon the use of land, as is a zoning ordinance, but a set of standards of safety which any apartment building must meet. (Many other laws and local ordinances contain requirements in the interest of safety and sanitation, applicable to various types of structures. See discussion in 1958 Wisconsin Law Review, 128, 133.) Each day during which a violation of the building code exists is a separate violation. Sec. 101.18, Stats. An owner is liable for a forfeiture of not less than $10 nor more than $100 for each offense. Sec. 101.28. Thus plaintiffs, upon accepting the conveyance and continuing the particular use for which the structure was presumably designed or adapted immediately became violators of the law. There was not a mere possibility that they might be compelled to alter the structure so as to effect compliance and escape payment of forfeitures. The issuance by the commission of its certificate demonstrated that official action to compel alteration was imminent.
Defendant argues that compliance with the building code and similar laws is a matter of the fitness of a building for a particular use and that the grantee should have no right of action unless the grantor has made a warranty on that subject. Moran v. Borrello (1926), 4 N. J. Misc. 344, 132 A. 510, involved an express provision that a building complied with state tenement-house regulations. Defendant's reasoning was used in Berger v. Weinstein (1916), 63 Pa. Super. 153, followed in Stone v. Sexsmith (1947), 28 Wn.2d 947, 184 P.2d 567; 21 C. J. S., Covenants, p. 955, sec. 98. In the Pennsylvania case a requirement as to minimum thickness of a wall had been violated and grantee was later compelled to rebuild the wall. In the Washington case wiring was defective at the time of conveyance and several months later, the state compelled correction of the condition. Both courts evidently considered the vast number of instances where violations of safety and sanitary regulations might exist and constitute encumbrances if they decided those cases otherwise. The situation seems somewhat different where official action has been taken before the conveyance so that enforcement action is imminent when the deed is delivered.
Plaintiffs alleged not only that violations existed, but also alleged the issuance of a certificate of inspection by the commission prior to the conveyance. We now decide only that a violation of this type of regulation with respect to which the agency charmed with enforcement has begun to take official action is an encumbrance.
Defendant points to cases where obvious physical conditions of premises have been considered such notice to everyone that the parties must be considered to have fixed the terms of the transaction with those conditions in mind. Kutz v. McCune (1868), 22 Wis. *628, *631 (flooding of land is notice of outstanding flowage rights); Chandler v. Gault (1923), 181 Wis. 5, 11, 194 N.W. 33 (presence of telephone line is notice of outstanding easement, including right to trim trees). "Sometimes, however, when the actual physical conditions are apparent and are in their nature permanent and irremediable, they are held to have been within the contemplation of the parties in fixing the price and are deemed not to be included in a general covenant against encumbrances." 14 Am. Jur., Covenants, Conditions and Restrictions, p. 548, sec. 100. We consider that violations described in the certificate of inspection are not the type of obvious physical conditions to which this rule is applicable.
By the Court. — Judgment reversed, cause remanded for further proceedings according to law.