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
- 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.
- Whether a seller who lacks personal knowledge is responsible when he adopts and affirms his agent’s specific factual statements as true.
- 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.
Legal Principles
- A contract for the sale of land may be rescinded in equity when the buyer was induced by a material misrepresentation that is false and relied upon, even absent proof the speaker knew it was false.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.