Cherry v. Crispin

• Citation: 346 Mass. 89,190 N.E.2d 93
• Parties: Jay L. CHERRY et al. v. W. Chester CRISPIN et al.
• Decision Date: 07 May 1963
• Court: United States State Supreme Judicial Court of Massachusetts

Page 93

190 N.E.2d 93

346 Mass. 89

Jay L. CHERRY et al. v. W. Chester CRISPIN et al.

Supreme Judicial Court of Massachusetts, Norfolk.

Argued April 3, 1963.

Decided May 7, 1963.

James P. Lynch, Jr., Boston, for W. Chester Crispin and another.

James C. Roy, Boston (Israel Cherry, Lynn, with him), for plaintiffs.

Before WILKINS, C. J., and SPALDING, CUTTER, KIRK and SPIEGEL, JJ.

SPIEGEL, Justice.

This is a suit in equity in which the plaintiffs seek rescission of a conveyance of real estate alleging fraud and misrepresentation on the part of the defendants. ¹ The defendants have appealed from a final decree granting, in effect, rescission of the conveyance. Portions of the evidence are reported. The trial judge made 'Findings of Fact, Rulings of Law and Order for Decree' which he thereafter adopted as a report of material facts. We summarize the pertinent findings.

The defendants, husband and wife, were the owners of a parcel of land with a dwelling and garage thereon in the town of Cohasset. On December 11, 1959, they entered into a purchase and sale agreement with the plaintiffs, also husband and wife, whereby the property was to be sold to the plaintiffs for $21,000, and conveyance to be made on or before February 11, 1960. The agreement provided that the sale was contingent upon the plaintiffs acquiring a so called 'G. L.' mortgage. Specifically, the sale was contingent upon '(1) V.A. appraisal in an amount not less than the purchase price; or (2) the seller's acceptance of the price set by the V.A. appraiser, in which case both parties shall be deemed bound to performance; and (3) V.A. approval of the purchaser's mortgage to finance the sale.' An essential condition to such approval was satisfaction of the Veterans' Administration's (V.A.) requirement that 'The Seller shall furnish Veteran Purchaser prior to settlement a written statement (or certification) from a recognized exterminator that there is no evidence of termites or other wood boring insects in the property.' On February 2, 1960, the plaintiff, Jay L. Cherry, received a letter from the Home Savings Bank notifying him of its approval of his application 'for a G.I. loan,' and advision him of the necessity for securing a written statement from a recognized exterminator. Cherry then called one William Matthews, an employee of the broker in the transaction, regarding the letter from the bank. Matthews offered 'to take care of it' and, in turn, called the Crispin home and explained to Mrs. Crispin the V. A. requirement of an exterminator's certificate. He told her that the seller must obtain the letter or certificate and pay for the termite inspection. She authorized Matthews to engage a recognized exterminator. On February 4, 1960, Matthews communicated with an exterminator, whom he had engaged on prior occasions, and requested 'the usual certificate' from him. The examination and inspection of the premises by this exterminator 'was done, if at all, in a very careless manner.' Although there was extensive and obvious evidence of 'termite and wood borer activity in various parts of the house, inside and out,' on February 4, 1960, the day he claims to have made the examination, he stated in a letter addressed to Crispin, but sent to Matthews: 'There is no evidence of termite or wood-borer activity in the structures.' The exterminator knew or should have known that conditions on the premises would not have satisfied the V. A. requirement involved. When Matthews received the exterminator's letter, he telephoned Cherry and 'acquainted him with its contents.' On February 10, 1960, papers were 'passed' in the office of the bank's lawyers. The exterminator's letter was referred to in the presence of the defendants during this closing, and read by Cherry who 'relied upon its contents in going through with the sale.' At the closing and at the time the purchase and sale agreement was executed, the defendants 'had reason to believe that termites and wood-borer insects had infested parts of the house.' They 'knowingly permitted and acquiesced in the false representation made at the passing of papers to the effect that there was 'no evidence of termites or wood-borer insects.'' The Home Savings Bank was relying upon the V.A. approval in making the loan, and the V. A. would not have approved the mortgage without the certificate from the recognized exterminator.

The Cherrys moved into the house on March 11, 1960, and, within a few days, saw evidence of termites and 'wood-borer insects.' 'The * * * work necessary to relieve the premises of termites and wood-borers and install termite control will cost $1,500.' Since acquiring the property the plaintiffs have spent about $40 on the garage and painted the inside of the house.

One who has relied upon a misrepresentation as to a material fact, intentionally made and knowingly false, is entitled to rescission of the disputed...