Who you gonna call?

Who you gonna call?

By Juna Phillips and Kara Fischer

Unlike most ghost stories, the one adjudicated in Stambovsky v Ackley, a decision of the Appellate Division of the New York Court in 1991, did not start on a dark and stormy night; but rather with the signing during daytime by Mr Stambovsky, who lived in New York City, of a deed of sale for the purchase of a riverfront Victorian mansion in the quaint village of Nyack (population less than 6 000 at the time) situated in New York State.

After paying a deposit of USD 32 000, but before taking transfer of the property, Stambovsky, “to his horror“, discovered that the house was haunted by poltergeists.  It is not disclosed whether he actually met the “noisy ghosts”, or whether he read about them in the media.  Ms Ackley had for years been telling the story of seeing and experiencing “spectral apparitions” in the house, and even organised haunted house tours.  According to her, there were at least three ghosts in residence (the story made the Readers’ Digest in 1977).  Stambovsky was spooked, and sued for cancellation of the deed of sale, and repayment of the deposit.

The Court of first instance held against Stambovsky, based on the rule of caveat emptor (let the buyer beware):

The doctrine of caveat emptor requires that a buyer act prudently to assess the fitness and value of his purchase and operates to bar the purchaser who fails to exercise due care from seeking the equitable remedy of [cancellation].

Stambovsky appealed, and won by a narrow margin.  The minority (two judges) delivered a rather dry opinion confirming the application of the rule of caveat emptor.  The majority (three judges) were more animated:

Defendant seller deliberately fostered the public belief that her home was possessed.  Having undertaken to inform the public at large, to whom she has no legal relationship, about the supernatural occurrences on her property, she may be said to owe no less a duty to her contract vendee.

The impact of the reputation thus created goes to the very essence of the bargain between the parties, greatly impairing both the value of the property and its potential for resale.

I am … moved by the spirit of equity to allow the buyer to seek [cancellation] of the contract of sale and recovery of his down payment.

How would a South African court resolve a similar “parapsychic” case today?  Per the Constitution, we are “united in our diversity“.  According to traditional African religion, the dead continue their existence as ancestors in the form of shades or spirits, and have the power to affect the living, positively and negatively (several illnesses are attributed to the ancestors).  Given appropriate facts, a house being ‘haunted’ may perhaps be a latent defect that could defeat a voetstoots clause.

Also in this issue:

More quotes from Ronald Coase

Am I too loud?

When constitutional rights are in conflict

The ambiguous comma

Who Must Stay, Who Must Go?