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Altevogt v. Tom Brinkoetter & Co.

OPINION FILED MARCH 5, 1980.

HOMER F. ALTEVOGT ET AL., PLAINTIFFS-APPELLANTS,

v.

TOM BRINKOETTER AND COMPANY ET AL., DEFENDANTS-APPELLEES. — (THE CITIZENS NATIONAL BANK OF DECATUR, DEFENDANT.)



APPEAL from the Circuit Court of Macon County; the Hon. DONALD W. MORTHLAND, Judge, presiding.

MR. JUSTICE GREEN DELIVERED THE OPINION OF THE COURT:

Plaintiffs, Homer F. and Sarah M. Altevogt, appeal portions of a June 6, 1979, judgment of the circuit court of Macon County dismissing in bar of action count I of the second amended complaint directed against defendant Thomas Brinkoetter and count III directed against defendant John (Sonny) Hinton. They do not appeal the dismissal of the other count of that complaint, count II, directed against defendant, Citizens National Bank of Decatur (Citizens).

The complaint sought recovery for imperfections in a house built by defendant Hinton for defendant Brinkoetter and sold by him to plaintiffs. Count I claimed a breach of an implied warranty of habitability, and count III maintained that plaintiffs were entitled to damages as third-party beneficiaries of a warranty of reasonable workmanship impliedly made by Hinton to Brinkoetter when Hinton agreed to construct the house. The judgment of dismissal was entered pursuant to motions of Brinkoetter and Hinton, with each contending that the count directed against them failed to state a cause of action and, if it did do so, the cause was shown on the face of the complaint to be barred by the statute of limitations. The trial court recited the statute of limitations as the reason for its ruling as to count I and the failure of count III to state a cause of action as the reason for its ruling as to that count.

Count I alleged that (1) sometime prior to June 8, 1973, defendant Brinkoetter placed a certain lot of land in a land trust with defendant Citizens as trustee and then through that trustee "built or caused to be built" a residence thereon; (2) on May 1, 1973, Brinkoetter contracted to sell the premises to plaintiffs; (3) on June 8, 1973, "plaintiffs purchased the premises from said trustee"; (4) Brinkoetter knew plaintiffs were buying the property as a dwelling for themselves and their family; (5) by the contract and the sale, Brinkoetter impliedly warranted that the residence would be fit for habitation; (6) the house was unfit for habitation for various enumerated reasons; (7) those defects were unknown to plaintiffs at the time of purchase or completion of the house and could not have then been discovered by any reasonable means; and (8) plaintiffs were damaged thereby. The count did not state when the house was completed.

The parties do not dispute that the statutory five-year limitation for bringing suit for breach of an oral contract (Ill. Rev. Stat. 1977, ch. 83, par. 16) is also the applicable limitation for bringing an action for breach of an implied warranty. (Mowatt v. City of Chicago (1920), 292 Ill. 578, 127 N.E. 176; Schmidt v. Kiely (1977), 51 Ill. App.3d 122, 366 N.E.2d 455.) The dispute is as to when the period starts to run. Both plaintiffs and defendant Brinkoetter look to language in Petersen v. Hubschman Construction Co. (1979), 76 Ill.2d 31, 389 N.E.2d 1154. There the court held that a builder-vendor of dwellings built by it for sale to others, impliedly warrants in its contract of sale to the original purchaser that the dwelling is habitable and that this warranty is not merged in the deed given by the vendor upon the sale. Plaintiffs rely on the following statement as establishing the rule that the period of limitation begins when the house is completed:

"* * * we hold that implied in the contract for sale from the builder-vendor to the vendees is a warranty that the house, when completed and conveyed to the vendees, would be reasonably suited for its intended use." (76 Ill.2d 31, 42, 389 N.E.2d 1154, 1159.)

Defendant Brinkoetter relies on the following to show that the period begins with the agreement to sell the house to the purchaser:

"* * * The implied warranty does not arise as a result of the execution of the deed. It arises by virtue of the execution of the agreement between the vendor and the vendee." 76 Ill.2d 31, 41, 389 N.E.2d 1154, 1158.

The trial court agreed with Brinkoetter and held that, on the basis of the allegations of count I, the limitation period began to run on the date of the contract, May 1, 1973. That was more than five years before the original complaint was filed on July 12, 1978.

• 1 We agree with plaintiffs. As argued by Brinkoetter, the warranty does arise impliedly from the contract of sale. However, when a deed subsequently passes, the implied warranty is not merged in the deed (Petersen) but continues. The warranty is as to the condition of the house at the time it is completed and the deed has passed (Petersen). Thus, the warranty cannot be breached until both of those things have taken place. If, when those things do occur, the house is habitable, the implied warranty is fulfilled. If it is not then habitable, the implied warranty is breached and the period for bringing an action for the breach would begin to run unless tolled for some reason. Cases from other jurisdictions have been called to our attention. We deem the soundest to be Sponseller v. Meltebeke (1977), 280 Ore. 361, 570 P.2d 974, which reaches the same conclusion as we do. (See also Tomes v. Chrysler Corp. (1978), 60 Ill. App.3d 707, 377 N.E.2d 224; Matchett v. Rose (1976), 36 Ill. App.3d 638, 344 N.E.2d 770.) We hold that the limitation period for the implied warranty of habitability of a dwelling begins to run when the house is completed and the deed for the house has passed, whichever is later.

Defendant Brinkoetter's claim that the statute of limitations had run was stated in terms that count I of the complaint showed on its face that it was barred for that reason. Because the count did not state when the house was completed, it did not show when the statute began to run. As that was not shown we cannot tell when the limitation period expired, and thus we cannot find that the count shows on its face that the period had expired. Accordingly, the count should not have been dismissed for the reason stated.

We recognize that a dispute exists between the parties as to whether the limitation period was tolled against Brinkoetter (1) when the second amended complaint was filed on March 9, 1979, first making him a party, or (2) whether section 46(4) of the Civil Practice Act (Ill. Rev. Stat. 1977, ch. 110, par. 46(4)) operated to toll the period when the original complaint was filed on July 12, 1978, and Tom Brinkoetter was named as a party. In view of our ruling that count I did not show when the limitation period ended and thus did not show on its face that the period had run, we need not discuss this matter further on this appeal and on the basis of this record.

Plaintiffs contend that the implied warranty of habitability recognized in Petersen arises also from the sale of a new house built for the market when the seller is not, as in Petersen, also the builder of the house but is merely a developer who has contracted with an independent builder to construct the house. The record does not indicate that the trial court passed on the question of whether such a cause of action exists or whether count I was sufficient to allege such a cause of action. Because of the importance of this question and the precedent to be set by an ultimate ruling thereon, we deem it appropriate that we do not pass upon these questions until the trial court has done so. Hickey v. Illinois Central R.R. Co. (1964), 30 Ill.2d 163, 195 N.E.2d 716.

Count III alleged that (1) Hinton contracted with Brinkoetter to build a house for the latter on the premises in question; (2) in contracting Hinton impliedly warranted to do the work in a reasonably workmanlike manner; (3) Hinton knew the house was not to be inhabited by Brinkoetter but was to be held out for sale to buyers; (4) on June 8, 1973, plaintiffs purchased the premises and have paid the full purchase price; (5) the residence was completed on or about the last week of July 1973; (6) the house was not constructed in a reasonably workmanlike manner in enumerated ways; (7) the defects were unknown to plaintiffs until after the house was completed and could not have reasonably been discovered sooner; (8) plaintiffs notified ...


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