Balmer v. Nash

ARNOLD, Judge. Plaintiffs contend that the trial court erred in denying their claim for breach of an implied warranty. They rely on the language of Hinson v. Jefferson, 287 N.C. 422, 215 S.E. 2d 102 (1975), in which the court stated: [W]here a grantor conveys land subject to restrictive covenants that limit its use to the construction of a single-family dwelling, and, due to subsequent disclosures, both unknown to and not reasonably discoverable by the grantee before or at the time of conveyance, the property cannot be used by the grantee, or by any subsequent grantee through mesne conveyance, for the specific purpose to which its use is limited by the restrictive covenants, the grantee breaches an implied warranty arising out of said restrictive covenants. 287 N.C. at 435, 215 S.E. 2d at 111. For plaintiffs to prevail on the implied warranty question they must first show that the property cannot be used for residential purposes. We note that while it has been proven that the property will not support an approved septic tank system, and cannot be connected to an approved public or community sewage system, both permitted by G.S. 130-160 to indicate suitability for residential use, there has been no clear showing that a privy cannot be approved for the property. Assuming, however, that a privy could not be approved, we find that plaintiffs have failed to show that the subsequent disclosure that the property is not suitable for a septic tank system, and the fact that there is no public system to which the property could be connected, were “both unknown to and not reasonably discoverable by them,” as is required by Hinson v. Jefferson, supra. In fact, the record shows that these facts were reasonably discoverable by plaintiffs. Plaintiffs lived on a lot which adjoined the property and were, therefore, familiar with its topography. They knew that the property is gullied and sloped and contains a wet weather creek. Moreover, defendants, plaintiffs’ grantors, asked the county health department to examine the property to determine if it could support a septic tank system before they bought it. Plaintiffs’ intended grantee, James Ross, did the same. Certainly plaintiffs themselves could have asked the health department to make the same investigation. We find that [404] the fact that the property could not be used for residential purposes was reasonably discoverable by plaintiffs. Their claim for breach of an implied warranty was properly denied. Plaintiffs next contend that they were entitled to a rescission of the deed in that the parties were mutually mistaken as to the suitability of the property for an on-site sewage system. Just as Hinson v. Jefferson is controlling on the implied warranty question before us, it also answers any question about mutual mistake. In that case, the court stated: [b]ecause of the uncertainty surrounding the law of mistake we are extremely hesitant to apply this theory to a case involving the completed sale and transfer of real property. Its application to this type of situation might well create an unwarranted instability with respect to North Carolina real estate transactions and lead to the filing of many non-meritorious actions. Hence, we expressly reject this theory as a basis for rescission. 287 N.C. at 432, 215 S.E. 2d at 109. We find that plaintiffs’ contention is without merit, as the mutual mistake theory has been expressly rejected by the court in Hinson, supra. The order by the trial court denying plaintiffs’ rescission of the deed is Affirmed. Judges Hill and Braswell concur.