For reversal -- Chief Justice Weintraub, and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Haneman, J.
Plaintiffs, purchasers of a dwelling house, seek the recovery of damages from defendant vendor, resulting from claimed faulty construction. The action is based upon alleged express and implied warranties of the defendant. After trial in the Camden County District Court, without a jury, judgment was entered for defendant. Plaintiffs appealed to the Appellate Division. We certified on our own motion before argument in the Appellate Division. R.R. 1:10-1(a).
The facts are as follows: In July 1958 defendant, engaged at the time in the construction of dwelling houses for sale on a tract of land which it was developing in Cinnaminson Township, erected the dwelling here involved. Until June 25, 1959, the house was used as a sample for display to potential purchasers of properties in defendant's development. On May 28, 1959 plaintiffs entered into an agreement to purchase said house. Possession was delivered to plaintiffs as lessees on June 25, 1959. Final settlement and conveyance of title occurred on July 28, 1959, at which time defendant delivered a "Warranty of Completion of Construction in Substantial Conformity with Approved Plans and Specifications," which provided, in part:
"The dwelling located on the property identified in the caption hereof is constructed in substantial conformity with the plans and specifications (including any amendments thereof, or changes and variations therein) which have been approved in writing by the Federal Housing Commissioner or the Administrator of Veterans Affairs on which the Federal Housing Commissioner or the Administrator of Veterans Affairs based his valuation of the dwelling: Provided, however, That this warranty shall apply only to such instances of substantial nonconformity as to which the Purchaser(s)/Owner(s) or his (their) successors or transferees shall have given written notice to the Warrantor at any time or times within 1 year from the date of original conveyance of title to such Purchaser(s)/Owner(s) or the date of initial occupancy of the dwelling, whichever first occurs: Provided further, however, That in the event the Purchaser(s)/Owner(s) acquired title to the captioned property prior to the completion of construction of the dwelling thereon, such notice of nonconformity to the Warrantor may be given at any time or times
within 1 year from the date of completion or initial occupancy of such dwelling, whichever first occurs.
This warranty shall be in addition to, and not in derogation of, all other rights and privileges which such Purchaser(s)/Owner(s) may have under any other law or instrument, and shall survive the conveyance of title, delivery of possession of the property, or other final settlement made by the Purchaser(s)/Owner(s), and shall be binding on the Warrantor notwithstanding any provision to the contrary contained in the contract of purchase or other writing executed by the Purchaser(s)/Owner(s) heretofore or contemporaneously with the execution of this agreement or prior to final settlement.
NOTICE TO PURCHASER: Any notice of nonconformity must be delivered to the Warrantor no later than June 25, 1960. (Warrantor shall insert date 1 year from initial occupancy, date of conveyance of title or date of completion, whichever event is applicable.)"
Approximately 60% of the basement was panelled and was furnished as living quarters on the date of sale. At the time the agreement of sale was negotiated, Moreno Caparrelli, one of the plaintiffs, called the attention of defendant's president, Dinerman, to the presence of moisture on the walls and floor of this panelled area. Dinerman remarked that the condition was a result of keeping the house closed and that the moisture would disappear after the premises were inhabited and the doors and windows were opened. Dinerman further asserted that the panelled section of the basement was a habitable area of the house, usable for normal daily activity.
The moisture condition did not abate, and in August 1959, plaintiffs installed an air conditioner-dehumidifier unit in an attempt to alleviate the condition. In September 1959, after a heavy rainstorm, the basement was flooded with several inches of water. Shortly thereafter, Moreno Caparrelli orally called this occurrence to the attention of Dinerman and asked for help in rectifying the situation. No action was forthcoming from defendant. Although the inundation subsided, the moisture condition gradually worsened during the 15 or 16 succeeding months. By Christmas of 1960, plaintiffs continuously were forced to keep towels, rags, and similar materials at the baseboard in order to absorb the percolating
water. On several occasions between September 1959 and December 25, 1960, plaintiffs requested defendant's aid in alleviating the condition, but to no avail. The presence of moisture and water prevented plaintiffs and their family from ever using the basement for normal daily activity.
On the morning of January 1, 1961, plaintiffs awoke to find three to four inches of water on the basement floor and water pouring over the baseboard. After the plaintiffs' neighbors assisted in pumping the water out of the cellar, they joined in excavating along the exterior foundation wall, adjacent to the room here involved. It was then discovered that there was no parging on the foundation wall and that no cove had been constructed at the intersection of the concrete footing ...