Aldrich v. Scribner, 154 Mich. 23, 117 N.W. 581 (Mich. 1908)

Facts

  • Frank Aldrich purchased real property owned by Enoch Scribner, who marketed the land through an agent.
  • The agent represented that the property contained about 175 fruit trees in good condition to bear fruit.
  • Scribner had not seen the land, but confirmed to Aldrich that the agent’s statements were true.
  • Aldrich relied on the representations in deciding to buy.
  • After the sale, the representations proved false as to the number and condition/productivity of the fruit trees.
  • Aldrich sued seeking relief for misrepresentation; the trial court directed a verdict for Scribner, and Aldrich appealed.

Issues

  1. Whether a buyer may obtain equitable rescission for a material false representation that induced a land sale, even if the representation was made without actual knowledge of falsity.
  2. Whether a seller who lacks personal knowledge is responsible when he adopts and affirms his agent’s specific factual statements as true.
  3. Whether the appropriate relief is equitable rescission and restoration of the parties’ pre-contract positions rather than tort-style damages.

Decision

  • The Michigan Supreme Court reversed the directed verdict for Scribner.
  • The court held that equitable relief was available where a material representation was false and relied upon, even if innocently made.
  • The case was treated as supporting rescission/adjustment to restore the parties, not recovery of full deceit damages.
  • A contract for the sale of land may be rescinded in equity when the buyer was induced by a material misrepresentation that is false and relied upon, even absent proof the speaker knew it was false.
  • A party who, without personal knowledge, adopts and affirms a definite factual representation as true may be held responsible when it proves false and materially influences the transaction.
  • In innocent-misrepresentation rescission cases, the remedy is generally limited to undoing the transaction and restoring benefits received, rather than awarding full tort damages.

Conclusion

The court recognized that a materially false, relied-upon representation in a land sale can justify equitable rescission even when made without actual knowledge of falsity, particularly where the seller affirmatively vouched for an agent’s specific statements as true.