Appeal from the Circuit Court for Montgomery County; Pugh, J.
Brune, C.J., and Henderson, Prescott, Horney and Sybert, JJ. Horney, J., delivered the opinion of the Court.
In this law action for fraud and deceit arising out of an alleged misrepresentation made by a seller to a prospective purchaser
of a house and lot with respect to the probability of a creek overflowing during heavy rainstorms, the contentions on appeal are: (i) that the trial court should have granted the motion for a directed verdict because there was insufficient proof of misrepresentation; (ii) that there was no admissible proof of reliance on the misrepresentation; and (iii) that it was error to admit evidence of a representation made subsequent to the date of the contract to purchase.
On December 22, 1959, one of the purchasers (Nathen P. Edwards), accompanied by a real estate saleswoman, went to inspect the property of the sellers (Gerald A. and Grayce K. Walsh), at 8600 Burning Tree Road in Bethesda, and were admitted by Grayce Walsh. Gerald Walsh was not present. In the evening of the same day, Nathen Edwards with his wife (Doris B. Edwards) returned to have another look at the property. On this occasion neither of the sellers was at home. Two days later a contract of sale was executed between the sellers and the purchasers. The contract contained no warranties. On his first visit to the property, Nathen Edwards had seen a shallow creek of about 20 to 30 feet in width in the rear of the property, had inquired as to its depth and what it was likely to do "during a storm," and had received certain assurances. When all of the parties met to close the sale on January 15, 1960, Doris Edwards, because she had small children and was concerned "about living on a creek," asked Grayce Walsh about the water in the creek and again certain assurances were made. The purchasers made final settlement and accepted a deed.
The creek flowed in a westward direction and made an almost right angle bend to flow southward behind the Edwards property and the properties of others. Burning Tree Road, by means of a bridge recently constructed over the creek at a point above the right angle bend, crossed the creek from the north and ran south in front of the above properties. In August of 1960, as had happened at least twice during heavy rainstorms in each of the two previous summers, the creek overflowed its banks at the bridge and flooded in a southerly and southwesterly direction onto the downsloping Burning Tree Road, and across the above properties to reenter the mainstream
of the creek which had turned the bend and was then flowing southward. Most of the water that flowed across the Edwards property -- except that which flowed into the garage and the basement and under a door in the recreation room to the terrace in the rear of the house -- tended to flow down the swales on both sides of the house until it reached the level of the mainstream. In taking this course, no water (other than that which flowed through the split-level house) ever reached the rear of the house. As a result of the flooding, extensive damage was done to the trees, shrubbery and lawn, to the outside and inside of the house, to the motor vehicles and other machinery in the garage, and to the household equipment, furniture and other goods that were below the level of the garage.
With respect to the alleged misrepresentation, Nathen Edwards testified at the trial that while he was being shown through the house by the saleswoman, he paused in the recreation room which had windows or glass doors that opened onto the terrace in the backyard. From the room he could see the bed of the creek and had inquired whether it was likely to overflow during a heavy downpour of rain. The question, which was directed to the saleswoman, was referred to Grayce Walsh, who was in the foyer but close enough to hear the conversation. According to Nathen Edwards, she replied that the "creek would come up over its banks in heavy rain but it never came near the house." According to the saleswoman, Grayce Walsh answered the question by saying that "the creek did not overflow from the rear of the house." But Grayce Walsh denied that she made a statement concerning the creek on that occasion. Nathen Edwards also testified to the effect that he and his wife would not have purchased the house but for the representation made by Grayce Walsh.
Doris Edwards testified that due to her concern for her children she had asked Grayce Walsh on the day of the settlement "if there was much water in the creek" and that she had said that "ordinarily there was very little -- just a few inches" and that "during a storm the creekbed sometimes filled up but that the water level went right down again within an hour or so" and that she did not think we "had anything to worry
about" because the children would not be outside anyway during ...