Summary of Kannavos v. Annino
Supreme Judicial Court of Massachusetts, 1969.
Facts: D advertised that she owned an building with apartments for sale. In fact D had converted her house into apartments and she did not have the permission of the city. ? bought the building but then city took action against the owner. ? brought a bill in equity against D to rescind the purchase.
Procedure: Trial court granted rescission.
Issue: Was there misrepresentation involved in this case?
Rationale: In the advertisement, D offered the houses as investment properties and referred to them as single houses converted to apartments. The houses were portrayed as investment and were presented as multi family houses. D knew that ? was planning to continue to use the building for apartments, and yet ? still failed to disclose the zoning and building violations. It is true that ? is not free from fault because he did not act prudently before purchasing the house, “Nevertheless, where there is reliance on fraudulent representations or upon statements and action treated as fraudulent, our cases have not barred plaintiffs from recovery merely because they did not use due diligence…"