APPEAL from the Circuit Court of Cook County; the Hon. HERBERT
R. FRIEDLUND, Judge, presiding.
MR. JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:
Harry S. Posner and Diane M. Posner, plaintiffs, sued Sander A. Davis and Pearl E. Davis, defendants, for fraudulently concealing certain defects in a house in Evanston, which plaintiffs purchased from defendants in 1973. The alleged defects included basement flooding, rotted basement stairs, roof leakage and water-soaked and rotted plaster. After a bench trial, defendants were found guilty of fraud and judgment was entered for plaintiffs for $3,500. Defendants appeal, arguing that (1) plaintiffs failed to prove fraud and (2) the evidence did not support the award of $3,500.
Sander Davis testified that during the eight to 10 years prior to the sale the basement had flooded whenever there was a heavy rain, the flooding sometimes reaching three inches. After the water receded, defendants would have to wash and mop the basement. He also testified that approximately one year to 18 months before the house was sold to plaintiffs, he hired a roofer to deal with a leakage problem in the main roof. Sander Davis admitted that at the time of the sale this leakage had caused part of a third-floor bedroom wall to rot. In addition, he testified that the porch roof had leaked prior to the sale. He stated that he had never told plaintiffs about any of these defects.
Plaintiffs testified that after purchasing the house from defendants they owned it for approximately 10 months before selling it in May 1974. During that time, the basement flooded on at least six occasions, and in a few instances the water contained fecal matter. The water would usually take a day to a day and one-half to recede, after which plaintiffs had to mop and clean the basement. Plaintiffs also found that the bottom basement stair had rotted due to flooding.
Plaintiffs further testified that the main roof leaked, causing part of a third-floor bedroom wall to rot. This leakage also caused part of the bedroom's ceiling to fall after plaintiffs had begun occupying the house. In addition, plaintiffs stated that the porch roof leaked and that water seeped into the ceiling of the dining room, which was adjacent to the porch.
Defendants contend that plaintiffs failed to prove fraud by clear and convincing evidence. (See Ray v. Winter (1977), 67 Ill.2d 296, 367 N.E.2d 678.) On June 8, 1973, plaintiffs entered into a contract to purchase defendants' home in Evanston. The sale was closed on July 25, 1973. Plaintiffs testified that the only statement either defendant made to them concerning any of the defects in the house took place on June 13, 1973, when Sander Davis allegedly told Harry Posner that defendants had never had a basement flooding problem. Defendants maintain that this alleged statement by Sander Davis, which at trial he denied having made, was plaintiffs' only evidence of fraud and that plaintiffs could not have relied on it when they entered into the real estate sales contract on June 8, 1973, because plaintiffs concede the statement was not made until five days later. Thus, defendants argue, plaintiffs failed to prove that when they purchased the house they detrimentally relied on a fraudulent statement or act by defendants concerning any of the defects, and that the judgment against them was against the manifest weight of the evidence, because detrimental reliance is an essential element of fraud. Defendants also argue that it is unlikely plaintiffs believed they had been defrauded, because plaintiffs did not file their complaint in this action until January 2, 1975, approximately 17 months after plaintiffs had begun occupying the house and eight months after plaintiffs had sold it.
Plaintiffs contend that, if the seller of a house at any time prior to closing misrepresents its condition, that misrepresentation may be the basis for a fraud action by a buyer who relied on it when closing the sale; that Sander Davis' alleged misrepresentation concerning basement flooding was made on June 13, 1973; that the closing was not until July 25, 1973, and that plaintiffs detrimentally relied on Sander Davis' misrepresentation when they closed the sale. Because of the conclusion we have reached, we need not consider this contention.
Plaintiffs argue that in addition to the misrepresentation by Sander Davis, there was clear and convincing evidence that defendants actively concealed the defects from plaintiffs prior to entering into the sales contract and that this constitutes fraud. We agree.
Both plaintiffs and defendants testified that defendants never told plaintiffs about the basement flooding problem. Plaintiffs also testified that the real estate broker did not inform them of the flooding. Furthermore, Sander Davis admitted he never advised the broker about the flooding or instructed the broker to inform prospective buyers of this condition.
In addition, plaintiffs and defendant Pearl Davis testified that plaintiffs made two visits to the house on a day shortly before June 8, 1973, the date of the sales contract. Harry Posner stated that on the first visit plaintiffs inspected the entire house, and Pearl Davis testified that Harry Posner examined the basement on this visit. Sander Davis testified that the main room in the basement had a tile floor and that flooding had, in part, caused some of the tiles there to flake and crack. He admitted he had removed many of these flaked and cracked tiles and had placed a large rug over the area where the tiles had been removed. This rug covered the entire floor of the main room in the basement, except for an approximately one foot border of intact tile extending around the room between the rug and the walls. Whenever the basement had flooded, defendants had taken the rug outside to dry, but Sander Davis admitted that the rug was never drying outside when plaintiffs visited the house. Moreover, Sander Davis admitted he never told plaintiffs that tiles under the basement rug were flaking and cracking, or that he had removed some of the tiles because of this damage. Sander Davis also testified that no watermarks were visible on the basement walls, and that the basement stairs were completely carpeted.
Harry Posner testified that on one occasion when the basement flooded after plaintiffs had moved into the house, he had to lift the carpet covering the bottom basement step in order to discover that the step had rotted and that water was seeping through there into the basement. In addition, Diane Posner stated that the flooding problem prompted plaintiffs to sell the house.
Sander Davis also testified that when the main roof leakage had caused plaster in part of the third-floor bedroom wall to rot, he had covered the damaged area with a vinyl fabric which was "maintainable and aesthetically acceptable." Also, Harry Posner testified that when he visited the house, both prior to and after entering into the contract, he saw nothing to indicate there was any problem with roof leakage. He further testified that it was not until sometime after plaintiffs had occupied the house that he placed his hand against the vinyl covering on the third-floor bedroom wall and discovered that main roof leakage had caused a substantial amount of plaster underneath to become wet and crumble. In addition, plaintiffs testified that defendants and the broker never told them about the roof leakage, and Sander Davis admitted he never said anything to plaintiffs about this problem.
Finally, Harry Posner testified that when plaintiffs purchased the house, they relied on the fact defendants did not disclose anything about basement flooding or roof leakage. He also testified plaintiffs would not have bought the house if they had known about these conditions.
1-3 In Russow v. Bobola (1972), 2 Ill. App.3d 837, 841, 277 N.E.2d 769, a suit involving active concealment of basement ...