MARK SOLOMON & another [Note 1] vs. MARVIN BIRGER & another. [Note 2]

KASS, J. By complaint filed August 7, 1979, Mark Solomon and Pauline Solomon (the "buyers") alleged that on December 9, 1968, i.e., eleven years previously, Marvin Birger and Eleanor Birger (the "sellers") had induced them through misrepresentation to buy a defective house. A Superior Court judge entered summary judgment in favor of the defendant sellers. [Note 3] This appeal followed. The basis urged by the defendants in favor of summary judgment was that the plaintiffs' action was long time-barred.

We summarize certain undisputed facts which we are able to deduce from a mass of affidavits, answers to interrogatories, responses to notices to admit facts, and depositions. The house in question is located at 104 Oldham Road, Newton, and was built in 1954, i.e., twenty-five years before this action was brought, by a home builder, Dorchester House Remodeling, Inc. Marvin Birger, one of the defendants, was the first buyer and resident owner. In 1959 Marvin Birger conveyed the property to himself and his wife as tenants-by-the-entirety. They continued to occupy the premises as their home until 1968, the year they sold the house to the plaintiffs.

On June 3, 1968, the Birgers, who were building a new home in Weston, placed their property for sale with a real estate brokerage firm. A broker from that firm took the Solomons through the house on June 22, 1968. There was no conversation of consequence between the prospective buyers and Mrs. Birger, who was at home during the tour. The Solomons were free to inspect the premises. About a month later, on July 5, 1968, the Solomons made a written offer to buy the Birger house for $36,000, an offer which the Birgers accepted. The offer form contemplated execution of a purchase and sale agreement and the parties, under date of July, 1968, [Note 4] executed an agreement on the Greater Boston Real Estate Board

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form (1962 rev.). Once again, the record discloses no conversation of consequence between the buyers and the sellers, and, indeed, neither of the sellers was present when the Solomons signed the agreement.

Delivery of the deed occurred on December 9, 1968. During the interim, the Solomons made a number of visits to the house. On one such visit Mrs. Birger took a painter through the house to estimate painting work to be done. Above an archway leading to the bedrooms, the painter noticed a crack five feet long and about an eighth of an inch wide. "What is this crack?" he inquired. Mrs. Birger replied, "Oh, it is probably from sonic boom." Mrs. Solomon construed that remark as "kind of" facetious. That statement is the one upon which the plaintiffs have fixed as the Birgers' oral misrepresentation of the condition of the house. [Note 5] There is no record of any other statement by the Birgers regarding the structural integrity of the house. So far as appears, neither the Solomons nor anyone on their behalf made a physical inspection, other than the walk through with the painter.

Within a few months after they moved in, Mr. Solomon discovered a large crack in the basement slab when he pulled back a rug. In 1970, the Solomons replaced a lower retaining wall, and, in 1973, they added a buttress wall at the rear of the house in an attempt to arrest movement of the back wall. In 1974, the Solomons noticed cracks in their front and rear foundation walls. There followed a series of consultations with engineers, contractors, and building consultants. One of the first of these, Tsiang Engineering, Inc., in 1975 reported that the house was settling because of, among other reasons, poor soil condition, horizontal soil pressure, poor fill material, and insufficient compaction of fill.

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During the discovery phase of the case, the battle was fought over the buyers' charge that the sellers had misrepresented and concealed the condition of the premises. The plaintiffs have conceded that a tort claim based on misrepresentation is time-barred, even giving effect to the extension provision which G. L. c. 260, Section 12, makes available in case of fraudulent concealment. [Note 6] Rather, the plaintiffs urge two theories of recovery linked to the purchase and sale agreement, an instrument expressed by its terms as under seal, and upon which the plaintiffs argue they can, therefore, maintain an action within twenty years of the date the cause of action accrued. G. L. c. 260, Section 1. The first of those theories is that the Birgers committed fraud in the inducement of the contract when Mrs. Birger made the "sonic boom" response to the painter's inquiry about the crack in the arch. A second theory relies on a clause in the contract which required delivery of possession of the premises "not in violation of . . . building laws."

1. Fraud. Actions for damages based on deceit sound in tort, a fact reflected in reported cases where the gravamen was that the plaintiff had been induced into a real estate transaction through the misrepresentation of a material fact by the defendant. See, e.g., Sheffer v. Rudnick, 291 Mass. 205, 205 (1935); Forman v. Hamilburg, 300 Mass. 138, 139 (1938) (wherein it is noted, however, at 142, that upon discovery of the fraud the plaintiff could have elected to rescind the contract); Swinton v. Whitinsville Sav. Bank, 311 Mass. 677, 677-678 (1942); Kabatchnick v. Hanover-Elm Bldg. Corp., 328 Mass. 341, 342 (1952); Fogarty v. Van Loan, 344 Mass. 530 (1962) (whether action for breach of warranty will lie for oral representation of quality of real estate not decided); Friedman v. Jablonski, 371 Mass. 482, 483-484 (1976); Nei v. Burley, 388

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Mass. 307, 310 (1983); Henshaw v. Cabeceiras, 14 Mass. App. Ct. 225, 225-226 (1982). [Note 7]

If we were to apply to the normal statute of limitations of three years [Note 8] the extension which G. L. c. 260, Section 12, affords, the latest the plaintiffs could have brought a tort action was within three years after they received the Tsiang report dated August 12, 1975. From that report the plaintiffs learned that their house suffered from a serious foundation defect, even if they may have been uncertain of its precise extent and nature. See Mansfield v. GAF Corp., 5 Mass. App. Ct. 551, 555 (1977). It will be recalled that the plaintiffs did not file their action until August 7, 1979. Conscious of that hurdle, the plaintiffs, after substantial discovery, filed with the court an election to abandon all actions other than those "based upon contract under seal." They did not, however, opt for rescission, a contract remedy that is available as an alternative to a tort action for deceit, although generally in circumstances where there has been only partial or relatively recent performance of the contract. See Forman v. Hamilburg, 300 Mass. at 142; Geoffrion v. Lucier, 336 Mass. 532, 537 (1957); McMahon v. M & D Builders, Inc., 360 Mass. 54 (1971); 12 Williston, Contracts Section 1523 (3d ed. 1970). Cf. National Academy of Sciences v. Cambridge Trust Co., 370 Mass. 303, 309 (1976). Actions for rescission must be brought with reasonable promptness. 12 Williston, supra, Section 1526, at 622. Cf. Restatement

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(Second) of Contracts Sections 164 and 380 (2) (1979). Rather, the plaintiffs argue that since the defendants' alleged misrepresentation served to induce the plaintiffs to sign the purchase and sale agreement as an instrument under seal, they may sue for damages on the basis of the misrepresentation at any time within twenty years of the performance of that contract.

An action on a written contract under seal enjoys a long statute of limitations because "the writing is clear evidence in permanent form of the terms of the agreement . . . ." 18 Williston, Contracts Section 2020, at 678 (3d ed. 1978). A misrepresentation of the sort here alleged is not written into the agreement and such evidence as the plaintiffs proffer is entirely oral.

The ephemeral nature of unwritten representations and the natural tendency of persons to reconstruct history in a self-justifying manner are considerations which militate in favor of restricting the time in which an action may be founded on them. In choosing the correct limitations period we look to the essential nature of the action, not its form. Hendrickson v. Sears, 365 Mass. 83, 85 (1974). Here the essential nature is deceit. The plaintiffs' theory would stretch the limitations period far beyond the extension already worked in cases of fraudulent concealment by the remedial provisions of G. L. c. 260, Section 12. It is a theory we do not endorse. Even were we to adopt the plaintiffs' reasoning, it would not help them. The asserted misleading statement was made several months after the parties signed the purchase and sale agreement and, therefore, could not have induced the plaintiffs to enter into the contract.

That the defendants failed to mention the house had developed cracks, including one in the basement obscured by floor covering, does not constitute fraudulent concealment. Homeowners who sell their houses are not liable for bare non-disclosure in circumstances where no inquiry by a prospective buyer imposes a duty to speak. Swinton v. Whitinsville Sav. Bank, 311 Mass. at 678-679. Nei v. Burley, 388 Mass. at 310-311. Henshaw v. Cabeceiras, 14 Mass. App. Ct. at 227. There must be some affirmative act of concealment of the cause of action. Salinsky v. Perma-Home Corp.,

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15 Mass. App. Ct. 193, 197 (1983). Compare Kannavos v. Annino, 356 Mass. 42, 50 (1969).

2. The building law clause. It requires a very expansive, indeed, imaginative, reading of the complaint to find a statement of the claim based on the building law clause in the purchase and sale agreement. The complaint never mentions any clause of the purchase and sale agreement which purports to make a representation. Rather, paragraphs 11 and 12 of the complaint make only general allegations of warranty by the sellers, without reference to any writing. As the defendants have elected to meet the plaintiffs on substantive rather than pleading grounds, and in view of the liberal amendment provisions of Mass.R.Civ.P. 15, 365 Mass. 761 (1974), we consider the issue which the plaintiffs press. It is based on sections 4 and 9 of the purchase and sale agreement, which was, as we have said, prepared on the January 1, 1962, revision of the form published by the Greater Boston Real Estate Board.

Section 4 of that agreement calls upon the seller to convey a good and clear record and marketable title, free from encumbrances, except, among other things, provisions of existing building and zoning laws. Section 9, upon which the plaintiffs heavily rely, provides: "Full possession of said premises free of all tenants and occupants . . . is to be delivered at the time of the delivery of the deed, said premises to be then (a) in the same condition as they now are, reasonable use and wear thereof excepted, and (b) not in violation of said building and zoning laws. . . ." Into this latter section, i.e., Section 9, the plaintiffs read a warranty by the sellers that the premises at the time of delivery of the deed will conform to the building code of the city of Newton. If the agreement so warrants, the materials submitted by the plaintiffs in opposition to the defendants' motion for summary judgment are sufficient to raise a question of fact whether at the closing between the parties a building code violation existed. [Note 9]

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We do not think that the purchase and sale agreement so warrants. Sections 4 and 9 of the agreement are interdependent. Section 4 deals fundamentally with the state of the title. It does so expressly and mentions building and zoning laws, party wall agreements, taxes, and betterments as aspects of title considerations. There is a blank subparagraph in which counsel tailoring the agreement may insert references to such things as easements. Under Section 4, certain fundamental criteria for conveyance of title are established so that the buyer, between the time of execution of the purchase and sale agreement and delivery of the deed, can investigate what kind of pig is in the poke. If the buyer discovers a building or zoning law violation, the buyer may, under Section 9, opt out of the agreement, unless the defect is cured in accordance with the provisions of Section 10. Section 9 is not expressed in terms of warranty, but rather in terms of the conditions upon which the buyer may accept or refuse conveyance.

It is difficult to imagine that an agreement designed by a real estate association would contain a twenty-year warranty about a fact of which the seller is likely to have imperfect knowledge, i.e., whether his structure, at the time of sale, conforms in every respect with the building code. Whatever doubt might exist about the meaning of the agreement is, however, resolved by the merger provision which appears in Section 13. That section is carefully drawn: "The acceptance of a deed by the Buyer or his nominee as the case may be, shall be deemed to be full performance and discharge of every agreement and obligation herein contained or expressed, except such as are, by the terms hereof, to be performed after the delivery of said deed." This language embodies the doctrine that acceptance of a deed ordinarily merges all obligations in the purchase and sale agreement, except those specified in the deed itself. Pybus v. Grasso, 317 Mass. 716, 717 (1945). Snyder v. Sperry & Hutchinson Co., 368 Mass. 433, 441-442 (1975).

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To this general rule, Massachusetts decisions have carved an exception given expression in Lipson v. Southgate Park Corp., 345 Mass. 621, 625-626 (1963), Holihan v. Rabenius Builders, Inc., 355 Mass. 639, 642 (1969), and McMahon v. M & D Builders, Inc., 360 Mass. at 59-60. All three cases involve house builders, i.e., there was a separate agreement to construct or repair a building upon the premises to be conveyed. In those circumstances it was plausible to reason that the obligation to build was collateral to the undertaking to convey. It was also reasonable to suppose that a purchaser from a builder-vendor would rely on the contractor's possessing the skill to build a house which is habitable. For a discussion of illustrative cases, see 12 Williston, supra, Section 1506A. In the case now before us there is no undertaking collateral to conveyance of the premises. The seller had no obligation to fix anything, to remove anything, or to add something. Nothing needed doing if the buyers decided, after investigation, that the conditions of conveyance had been met.

Moreover, the language of the merger clause in the agreement in this case is more carefully drawn than that considered in the Lipson, Holihan, and McMahon cases. The language in the instant case merges into the deed every agreement and obligation except "such as are, by the terms hereof, to be performed after the delivery of said deed." No provision appears in the agreement which by its terms calls for performance of an obligation after delivery of the deed. It is also worth noting that the form of agreement which the parties used was, unlike the form construed in the Lipson, Holihan, and McMahon line of cases, designed to cover the case of land with buildings on it. The sellers, who must surely have been surprised to be on the business end of a law suit eleven years after they passed a deed to their house, are entitled to the benefit of the language of their agreement.

That language, of course, has a purpose. The real estate market is unorganized in the sense that it has a vast number of individual buyers and sellers, some of whom participate in the market once or twice in their lives and move elsewhere thereafter. It is a market in which amateurs are the preponderant

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players. See Capezzuto v. John Hancock Mut. Life Ins. Co., 394 Mass. 399, 404 (1985). Buyers can -- and well advised ones do -- arrange for title searches and home inspections. They may also ask specific questions about the condition of the property, which sellers are bound to answer honestly. Kannavos v. Annino, 356 Mass. at 48. Once the transaction is completed, the parties are well served by being allowed to go their separate ways. This does not mean that sellers have a license to lie and cheat. If there have been misrepresentations, there is an adequate remedy in tort, and to the extent that the misrepresentation has been fraudulently concealed, the time for action is extended by G. L. c. 260, Section 12, as well as by those cases which deal with the inherently unknowable. See and compare Graveline v. BayBank Valley Trust Co., ante 253 (1985). Beyond that remedy for misconduct, we do not think we should encourage persons to litigate about their leaking roofs, faltering furnaces, inadequate drainage, and cracking walls long after the fact. [Note 10]

3. The deed. In a final effort to come within a twenty-year statute of limitations, the plaintiffs argue that they were induced by fraud to accept a deed, a sealed instrument. The deed delivered, however, was a short form quitclaim deed. See G. L. c. 183, Sections 8 & 11. Such a deed covenants no more than that the grantor conveys the premises free from encumbrances made by him. Silverblatt v. Livadas, 340 Mass. 474, 477-478 (1960). Mendler, Massachusetts Conveyancers' Handbook Section 18.1 (3d ed. 1984).

The motion judge rightly concluded that, on the facts as to which there was no material dispute, the plaintiffs' action was time-barred. He correctly allowed the defendant's motion for summary judgment.

Judgment affirmed.

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BROWN, J. (dissenting). My quarrel is with part 2 of the majority opinion. I think the majority unwarrantably rewrites an agreement arrived at between equal bargaining parties. Unlike the majority, it is not difficult for me "to imagine that an agreement designed by a real estate association would contain a twenty-year warranty about a fact of which the seller is likely to have imperfect knowledge, i.e., whether his structure, at the time of sale, conforms in every respect with the building code." A simple disclaimer that no zoning or building code violations have been noticed or cited by local public officials would more than adequately insulate these defendants and all such similarly situated sellers. I would think that if any group were aware of the problem, it certainly would be the preeminent real estate association in the area.

But more to the point. The plaintiffs assert that the warranty in the purchase and sale agreement of building code compliance was violated because the house had been constructed on uncompacted landfill contrary to the local building code. I think that the instant case is controlled in all material respects by McMahon v. M & D Builders, Inc., 360 Mass. 54, 59-60 (1971), which held that agreements which are not essential to the promise to convey do not necessarily merge with the deed, notwithstanding the existence of a merger clause in the accepted deed.

Notwithstanding the cogent analysis of the majority, I am of opinion that the present posture of the record does not lend itself to an immediate resolution of the merits, because the defendants' claims are, for the most part, inappropriate for determination in a summary judgment proceeding. See Mass.R.Civ.P. 56(c), 365 Mass. 824 (1974). The defendants admitted, pursuant to Mass.R.Civ.P. 36(a), 365 Mass. 795 (1974), that the purchase and sale agreement in the record is authentic and that it is a contract under seal. In their answer, they "admitted on information and belief" the allegation in the complaint pertaining to building code problems. [Note Dissent-1] Section 9 of

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the purchase and sale agreement appears to warrant that the building is in compliance with applicable local building codes. [Note Dissent-2]

The buyers have demonstrated a prima facie claim for breach of a sealed instrument, and, as such, the claim is not time-barred. See G. L. c. 260, Section 1. The buyers' claim would be barred only if (1) the warranty in issue was merged into the deed and thereby extinguished, superseded, or waived, or (2) the gravamen of the complaint is deemed exclusively to be fraud or some related tort which would be barred by the three-year statute of limitations, G. L. c. 260, Section 2A.

As a general rule the contractual duties of a seller of land are discharged by the buyer's acceptance of a deed. However, "there is an exception to the effect that promises in the original agreement which are additional or collateral to the main promise to convey the land and are not inconsistent with the deed as given are not necessarily merged in the deed, but may survive it and be enforced after the deed is given." McMahon v. M & D Builders, Inc., 360 Mass. at 59, quoting from Pybus v. Grasso, 317 Mass. 716, 717 (1945). See also Rouse v. Brooks, 66 Ill. App.3d 107, 110 (1978). In McMahon, the buyers sought to rescind a transaction because of false oral representations as to the quality of a nearly completed new house. The standard form purchase and sale agreement contained a provision that "[t]he acceptance of a deed by the Buyer shall be deemed to be a full performance and discharge hereof" (emphasis deleted). Ibid. This language was held "applicable only to the title . . . which was to be conveyed, and . . . the plaintiffs' acceptance of the deed operated as a merger or waiver only to the extent of precluding any claim that the title . . . did not satisfy the requirements of the agreement." Id. at 60. [Note Dissent-3]

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Promises concerning title and possession are essential to any conveyance, and consequently they are merged into the accepted deed. Id. at 59-60. On the other hand, promises that do not concern title or possession are collateral to the main agreement to convey and may be deemed not to have been merged into the deed. [Note Dissent-4] Ibid. The warranty language expressed in Section 9 of the purchase and sale agreement does not relate to title or possession -- that is, it neither clouds the title nor prevents possession of the property. The warranty concerns the question of habitability. A promise that a house is suitable for habitation has been held not to merge into the deed. Id. at 57, 60.

Viewing the allegations in the complaint in conjunction with the express warranty language in Section 9 of the purchase and sale agreement it becomes clear that the defendants were not entitled to summary judgment as matter of law. [Note Dissent-5] The verified complaint

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alleged that during the negotiation process and at the time of the acquisition of the premises the defendants made "express and implied warranties" to the effect that the house on the premises "was safe and fit for habitation and was free of major latent structural defects." Section 9 of the agreement would qualify as an express warranty made at the time of the acquisition of the property or during the period of negotiation. As the defendants' motion for summary judgment was not supported by affidavits, the requirements of Mass.R.Civ.P. 56(e), 365 Mass. 825 (1974), do not come into play and the plaintiffs' verified complaint can stand against the other documents filed in support of the motion. See Enterprise Music & Games, Inc. v. McCarthy, 9 Mass. App. Ct. 906 (1980).

The sellers' assertion that the local building code is not in evidence misses the point in this summary judgment proceeding. The sellers' contention that the building code issue was not raised below is specious; the code problem surfaces throughout the record. At the summary judgment stage the burden was on the defendants to establish that there was no issue of a building code violation.

I would reverse the judgment, vacate the order denying the plaintiffs' motion for partial summary judgment with regard to the defendant's statute of limitations contention, and remand the case to the Superior Court to stand for further proceedings.