Enterprises, Inc. v. Cardinale
| Decision Date | 30 March 1954 |
| Citation | 118 N.E.2d 740,331 Mass. 244 |
| Parties | ENTERPRISES, Inc. v. CARDINALE et al. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Herbert L. Barrett, Boston, M. Arthur Gordon, Boston, for plaintiff.
Harry M. Lack, Boston, for defendants.
Before QUA, C. J., and LUMMUS, RONAN, WILLIAMS and COUNIHAN, JJ.,
The plaintiff, a corporation, on August 28, 1952, brought this suit in equity against the defendants, who are husband and wife. On April 28, 1952, the parties had entered into an agreement under seal whereby the plaintiff agreed to buy and the defendants agreed to sell, for $21,000, a two family house in Malden. The agreement contained a covenant by the defendants that 'the rental for suite No. 1 is $100 monthly and the said apartment is registered at the rent control office for not less than $100.' The bill alleges that the rent for suite 1 is only $80 a month, that the rent is so registered at the rent control office, and that the representation by the defendants that the rent is higher was knowingly false and fraudulent. The prayer of the bill is that the agreement be rescinded, and that the $2,000 deposited by the plaintiff be returned with interest. The defendants in their answer denied the material allegations of the bill, and inserted a counterclaim alleging that the plaintiff has made substantial changes in the property which have seriously injured it, for which the defendants claim damages.
The evidence is reported, but the judge made no express findings of fact. A final decree was entered on February 19, 1953, dismissing both the bill and the counterclaim without costs. Further, the final decree provided that the defendants shall offer the plaintiff a deed within fifteen days, and if the plaintiff should accept it and pay the balance of $19,000, the bill is to be dismissed, and if the plaintiff should not accept the deed the defendants should keep the $2,000 deposited as liquidated damages. The plaintiff appealed.
It was agreed that on April 28, 1952, when the parties entered into the agreement of purchase and sale, suit 1 was registered at the rent control office at a rental of only $80 a month. The defendants were responsible for the misrepresentation, even though they believed in the truth of the fact stated. That fact was susceptible of actual knowledge, and was stated as a fact and not as matter of opinion estimate or judgment. Chatham Furnace Co. v. Moffatt, 147 Mass. 403, 18 N.E. 168; Weeks v. Currier, 172 Mass. 53, 55, 51 N.E. 416; Bates v. Cashman, 230 Mass. 167, 168, 119 N.E. 663. Although the defendants at all material times received $100 a month as rent for suite 1, such receipt was unlawful under Federal law and made them liable to the tenant paying such rent. U.S.C. (1946 ed.) Sup. V, Title 50, Appendix, §§ 1895, 1896, 50 U.S.C.A. Appendix, §§ 1895, 1896. The misrepresentation by the defendants was of concern to the plaintiff, for if the registration should continue at $80 a month the plaintiff, after taking title, could lawfully receive no more than the registered rent. By the agreement, title was to be conveyed to the plaintiff on or before August 1, 1952. But the time for conveyance was postponed until September 1, 1952. Before that day, the plaintiff gave notice that it rescinded the agreement on account of the misrepresentation, and demanded its deposit back.
It is true that on September 1, 1952, suite 1 was registered at the rent control office at a rental of $105 a month. But at the time when the plaintiff rescinded the agreement the registered rental remained less than $100 a month. The subsequent increase in the registered rental did not cure the misrepresentation. Rykiel v. Sklaver, 259 Mass. 608, 156 N.E. 842. The plaintiff was entitled to rescind at the time when it gave its notice of rescission, and was entitled to receive back its deposit. The final decree should have rescinded the agreement and ordered the defendants to repay the plaintiff's deposit with interest.
The final decree, as originally entered on February 19, 1953, dismissed the counterclaim of the defendants. An amendment of the final decree, entered on July 27, 1953, purported to strike out that dismissal. A final decree properly disposes of both bill and counterclaim. Blume v. Oil-O-Chron, Inc., 287 Mass. 52, 55, 191 N.E. 131; Day Trust Co. v. Malden Savings Bank, 328 Mass. 576, 577-578, 105 N.E.2d 363; MacDonald v. Goff, 329 Mass. 220, 224, 107 N.E.2d 198. Apart from the correction of some purely clerical error, no change in a final decree can be made...
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